Concept design of the Active Living Centre (image courtesy of the City of Vernon)

By Liam Verster

ALC Funding

Vernon moving forward with borrowing for Active Living Centre

May 28, 2024 | 5:00 AM

The City of Vernon is going to the bank to fund the new recreation hub.

Vernon City Council approved borrowing $31.5-million from the Municipal Finance Authority of B.C. to go towards the construction of the Active Living Centre (ALC) at the regular meeting Monday, May 27.

“[The money] is for the backhoes and the hole that’s being dug and the big pipes and all those things at the front end, final design,” Mayor Victor Cumming told Vernon Matters following Monday’s meeting.

“A number of these pieces all get paid for in the first twelve months of construction.”

This will be the first of a handful of loans required to build the ALC.

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“We’re thinking [of taking loans of around $31.5-million] every year, though the last year might be more, that’s when you pay out more,” Cumming said.

“We see three chunks of money, possibly a fourth chunk of money, but three big years. It’ll be this year, which is 2024, then in ’25 and ’26. So we’ll borrow most of the money we need over those three years.”

In total, the city will borrow up to $121-million to construct the ALC. The city said the maximum cost of the new recreation hub, including the city’s contributions, will not exceed $135,941,009.

Council also voted in favour of requesting the Regional District of North Okanagan consent to the borrowing of the funds on a 30 year repayment term.

In addition to approving taking out the loan, the city moved around some funds to cover some features in the new ALC.

At Monday’s meeting, council approved allocating $15-million from various internal sources to cover unbudgeted costs or opportunities, such as putting in additional features, that may arise during the construction of the facility.

Those contributions include:

• Growing Communities Fund – $2,945,433
• Kin Race Track Park Reserve – $5,000,000
• RCMP Building Reserve – $1,000,000
• Transit Expansion Reserve – $1,000,000
• Insurance Proceeds Reserve – $534,740
• Casino Reserve (2024) – $1,000,000
• Casino Reserve (2026) – $1,000,000
• 2023 Unexpended Balance – $1,519,827
• 2024 Unexpended Balance (projected) – $500,000
• 2025 Unexpended Balance (projected) – $500,000

The report to council noted the additional funds may not be needed until the final year of construction, and that the full $15-million may not be required for the project.

Mayor Cumming echoed that sentiment, saying the city was looking at opportunities from outside its reserves to help move the project forward.

“If we get those donations, [or sponsorships], or whatever, then we don’t end up needing internal money for that, and we are going to be looking for donations for these features,” Cumming told Vernon Matters.

“The taxpayer portion is the $121-million, the $15-million is basically what we already have in the bank in the go-forward and we’ll only really have to pay that out in 2026 if we find out that we’re unable to either lower the cost of the building through construction or we haven’t got the donations that we’re expecting.”

Money not spent on the project will go back into reserves to help fund future projects.

Council voted unanimously in favour of both motions without discussion at Monday’s meeting.

The new facility is expected to be fully built and ready for use by the fall of 2026.