Osoyoos Fire Department Chief Rick Jones stands inside the new Osoyoos firehall as part of a media tour he gave days before the facility officially opened just before Christmas. Town council voted Monday to officially borrow $5.74 million from the Municipal Financing Authority. Local ratepayers will repay the loan over the next 30 years. The project came in $220,000 under budget. (Richard McGuire photo)
Ratepayers in Osoyoos who will soon start making payments on the new $6.3 million fire hall will be pleased to know the project came in almost a quarter million dollars under budget.
Now that construction of the new fire hall has been completed and Fire Chief Rick Jones and his 30-member group of volunteers are now working out of the state-of-the-art facility, Town of Osoyoos council officially approved borrowing $5,740,147 from the Municipal Finance Authority of British Columbia on Monday morning.
During a referendum vote held as part of the 2015 municipal election, local taxpayers voted in favour of borrowing $5,962,657 to pay for the new fire hall.
The entire project was originally budgeted at $6,619,800 with the Town receiving $407,143 from federal gas tax grants and $250,000 from the Osoyoos Rural Fire Protection District.
The project came in $222,510 under budget with the final pricetag at $6,397,290, said Jim Zakall, the town’s director of financial operations during a presentation at a special open meeting of council on Monday morning.
“With this budget coming in $222,510 under budget, council can reduce the borrowing to $5,740,147,” said Zakall. “In addition, the current borrowing rate through the Municipal Financing Authority is at 2.85 per cent for a 10-year term.
The loan authorization bylaw relating to building a new fire hall in Osoyoos was first introduced in November of 2014.
The question posed to registered voters as part of the referendum asked for their approval for the Town of Osoyoos to borrow just under $6 million over 30 years for the construction of a new fire hall.
Close to 80 per cent of voters voted in favour of borrowing the money.
“The Town of Osoyoos issues their long term debt financing through the Regional District of Okanagan-Similkameen (RDOS) as per Section 182 of the Community Charter, which in turn borrows from the Municipal Finance Authority,” said Zakall.
“A resolution from council requesting consent of the borrowing needs to be made to the RDOS.
“For the borrowing to be included in the spring debt issue, the Regional District has to have their application for Certificates of Approval on their security issuing bylaws to the Ministry of Community, Sport and Cultural Development by Feb. 24, 2017. Their next meeting is Feb. 2 and they have requested that we need to have our resolution for borrowing to the RDOS by Jan. 24 at the latest.”
With the amount to be borrowed lowered by over $220,000 and the projected interest rate of 3.3 per cent on long-term debt financing reduced to 2.85 per cent over the next 10 years, the estimated cost of debt has been reduced from $27.48 per $100,000 of assessment based on improvements to $23.91 per $100,000 of assessment, said Zakall.
When local property owners receive their 2017 tax bill, there will be a separate item relating to debt repayment for the fire hall, but the full amount each property owner will have to pay over the next 30 years won’t be in place until tax bills are handed out in 2018, said Zakall.
If you’re house is assessed at $500,000, the annual bill relating to debt repayment for the fire hall will be just under $120 or $10 per month.
Coun. Mike Campol said having a project of this scope and size come in under budget is as encouraging as it is rare.
Coun. C. J. Rhodes, who listened in on Monday’s meeting over the phone as he is on vacation in Arizona, echoed the same thoughts saying everyone involved should be pleased the project came in under budget and “almost on time.”
Zakall said the contractors working on the project have completed all deficiencies and “everything has been covered” when it comes to completing all provisions within the construction contract.
Jones is planning a community grand opening for the new fire hall in early spring, but no date for that event has yet been confirmed.
KEITH LACEY
Osoyoos Times
