The West Carling Association expresses concern over the Council’s recent unanimous decision to guarantee a loan for the regional pool project. With a projected shortfall and unclear funding terms, the financial implications for residents are significant. Transparency and community consultation are essential as we navigate this situation.
Many thanks to our members who wrote to Council to express concerns about financing the regional pool project. The West Carling Association is disappointed to report that Council voted unanimously on December 10 to guarantee a bridge loan/line of credit (LOC) that has:
Council agreed to the LOC without discussing the total funds required to complete construction and the funds available to cover the costs. Originally, between the government grant and the contributions of the municipalities, the project had $32MM to work with. Adding two lanes to the pool raised capital costs from $32MM to $36MM, to be covered by $5MM in fundraising. Fundraising is at less than $1MM, and the project is over budget by $3.5MM for a total cost of $39.5MM. The construction shortfall remains unknown but will likely be $8MM at a minimum without delays or overruns. When asked about the plan should the loan default, Council said there is no plan. The municipalities and, therefore, taxpayers are liable for any shortfall. The municipalities are responsible for the interest (at 6.5%) as funds are drawn from the LOC and full repayment of those funds at the completion of the project.
When asked why Council changed its mind about guaranteeing a LOC now (having previously declined in April 2024), Mayor Murphy said borrowing wasn’t the issue but rather how the LOC would be structured. Council did not want to tie up reserves. Also, Council was concerned about the accounting complexity of each municipality taking out individual loans. The Pool Board has now arranged a single LOC, but it is unclear what the impact will be on Carling’s reserves.
Whitestone and McKellar municipalities have withheld additional funding. It is not known how Whitestone’s and McKellar’s unpaid share will be covered, but as Carling is responsible for 10.5% of all obligations, it is likely that, at a minimum, another $65,000 will have to come from Carling. This figure will rise proportionally if there are cost overruns.
At the December 10 meeting, it was revealed that the previous Council passed a resolution in 2019 to spend up to $1.5MM to build a regional pool. Council is now offering this resolution as the justification for providing funds beyond the $900,000 capital commitment Carling made in 2021. We are now told that any amount spent on the pool less than $1.5MM is “good news” because we haven’t spent $1.5MM yet. With fundraising at less than $1MM and a minimum $8MM shortfall, Carling’s share of the capital funds now needed to complete the project will likely be greater than $800,000 (without the gap left by Whitestone and McKellar) on top of the $900,000 already paid to the project. This exceeds the 2019 resolution unless fundraising picks up significantly. Additionally, Carling recently provided $157,500 as an interest-free loan to the Pool Board to assist with cash flow to be repaid once the LOC is in place.
When the 2021 agreement was signed, residents were told that Carling’s obligation was 10.5% of $8.5MM ($900,000). Why are we only hearing now that spending up to $1.5MM is okay because the previous Council declared it so? WCA has asked for years how much Council is prepared to spend on the pool. Is $1.5MM the actual number in play from Council’s perspective? Is this why it is now okay to risk spending more on the project by backing an unknown LOC? Does the $1.5MM cap set in 2019 include the funds spent on purchasing the land jointly with Parry Sound intended for the pool site? If so, Carling will far exceed the $1.5MM cap.
In response to whether Council is forever obligated to follow the decisions of previous Councils, Chief Administrative Officer (CAO) McLlwain responded to WCA by email that Council must honour agreements made by previous Councils due to potential liabilities. The current project is not as described in 2019, and the pool agreement was signed after this resolution in 2021. Does the 2019 resolution stand? Has Carling sought a legal opinion on whether the 2019 resolution is valid?
When the question was raised at Council whether the $1.5MM cap will be adequate to cover Carling’s obligation, there were two “good news” answers from CAO McLlwain:
1. Reserves are being replenished yearly by $50,000 from the Henvey Windfarm project ($1MM over 20 years), so there is little burden on the taxpayer.
Taxpayers were told the Henvey funds could only be used for recreational purposes and were earmarked to fund the pool. An email from the CEO of the Henvey project reveals that the Henvey project did not dictate this but is a decision made by a previous Council. Was there a resolution? Has our current Council confirmed this decision by a formal resolution? Is this a decision that Carling residents support, or would they rather have had a reduction in taxes?
2. Funding for any shortfall can come from financing, reserves and levies.
Funds for financing, reserves and levies come from tax dollars. How is this not a burden on the taxpayer? Carling residents have already paid ($900,000) through reserves built up over three to five years drawn from our tax revenue.
The bottom line is that Carling has agreed to guarantee an LOC with unclear terms for who knows how much. Carling taxpayers are in for at least $10.5% of whatever the Pool Board tells us must be paid to rescue this project. Would any of us run our personal finances relying on neighbours to tell us how much we will be spending? Carling has no real say in decision-making regarding the pool, with one vote at the table. Now that the choice to support the pool has been made on behalf of Carling residents, what projects and services are going on hold, or will our taxes go up to cover the costs of the pool?
WCA will continue to advocate for transparent information about the pool’s costs and a consultation with Carling residents to determine whether continuing to spend money on the pool has community support.