Following is the response by Olds' chief administrative officer Michael Merritt to concerns raised by retired businessman Dick Stauffer to council's decision to ask to have the town's debt limit increased.
Council did that so it could borrow $10,734,023 to finance construction of a new operations centre to replace several old ones and to reclaim the existing wastewater treatment centre land.
Why does the town have high debt?
- The long-term debt on our consolidated statement of financial position does not include the outstanding portion of the $4,000,000 loan guarantee for Olds Institute (OI). This guarantee is however included in our debt limit calculation. Mr. Stauffer in his 2017 calculations was not including the guarantee, but it is included in the $35 million referenced. Here are the numbers comparing apples to apples.
- 2017 debt limit calculation:
- Municipal - $5,735,514 debt per capita* = $624.51
- OI - $10,171,325
- OI guarantee - $3,886,414
- Total OI = $14,057,739 debt per capita* = $1,530.68
- Total debt limit used = $19,793,253 Total debt per capita* = $2,155.19
- 2020 debt limit calculation:
- Municipal - $21,697,661 debt per capita* = $2,362.55
- OI - $10,108,805
- OI guarantee - $4,000,000
- Total OI = $14,108,805 debt per capita* = $1,536.24
- Total debt limit used = $35,806,466 Total debt per capita* = $3,898.79
- **population used is 9,184 (2016 census)
- While our municipal portion of the debt per capita has increased over the last three years ($1,738.04) we have done some significant projects in the Town of Olds. NW Development, 70th Avenue upgrade, Rotary Athletic Park, and in 2020 the operations centre/wastewater treatment centre reclamation.
Why replace the operations centre?
- The town has five main facilities
o Operations centre(s)' various components built since the late 1950s
- Salt/sand storage building was built in the 1950s and moved into town 1968. This building was an old airport hangar.
- Main operations shop was built in 1963.
- ATCO portable office was purchased in 2009.
- Old fire hall that is now being used as the operations building was built in 1979 (and was) not built for its current use, and has not had any renovations to amend its use.
- Overall the various shops are overcapacity for years and in deteriorating condition as the town is not wanting to invest in the older buildings that were not originally designed for operations.
- Has been on 10-year capital plan since 2011 to be built in 2017.
- Wasn’t built for a town of 9,500 people. The town has grown more than four times the population (2,285 in 1960) since the 1960s.
- Vehicles are left outside (increases wear and tear and vandalism).
- Residents complain about location – interrupts residential area.
- Prior to 2011 the town did look to lease or purchase existing buildings – none were suitable due to height, ventilation, etc.
- New centre is on town property using the reclaimed wastewater site.
- Reclamation of former wastewater site to specifications of Alberta Environment and was required regardless.
- Building will have energy efficiencies built into the operations.
- Plan to have capacity to grow into the future.
- Condition and location of current buildings unsuitable for future.
o Town hall – built 1987
- Town moved to this location in 1998.
- Current location had capacity to grow (25 years since we moved).
- Repairs and renovations have been ongoing as needed to extend the life of the facility.
o Sportsplex – built in 1981 as a result of the fire that destroyed older building (38 years old)
- In good shape – regular capital maintenance plan to extend life.
- Continue to look for opportunities to enhance building.
- Utilized year round now versus seasonal.
o Aquatic Centre built in 2002 (17 years old)
- In good condition.
- Well maintained and regular capital maintenance plan to extend life.
- Renovations as planned and needed.
o Protective Services
- Well maintained.
- RCMP detachment built in 2005 (14 years old).
- Renovations are needed to address growth.
- Fire hall built in 2012.
- EMS also utilize our building.
o Rotary athletic park (opening in 2020)
- New park to address capacity of the sports teams, community groups utilizing facilities and to attract sporting events.
- Community has rallied to support enhancements to the park.
Why the operations centre can’t be deferred (see section on current operations centre above)
- Have been deferred past their useful life.
- Attempts in the past to utilize alternate buildings were not successful.
- The buildings will require major upgrades that will not address some of the capacity issues we are facing.
Economic performance of Olds
- In reviewing the key statistics such as development permits and overall assessment, the Town of Olds has seen an increase in both.
- The town has seen its building permits and assessments grow from $15.9 million in building permit values and assessment of $1.3 million to $23.6 million in building permit values and $1.4 million in assessment this year.
