Local politicians have decided which path they will take to close the funding gap for the proposed Greater Vernon Cultural Centre, and it will involve an increase in taxes.
At a special meeting Wednesday, Aug. 21, the Greater Vernon Advisory Committee (GVAC) was tasked with choosing how to move forward on the project, which has been beleaguered by cost escalation that has swollen the budget to $46 million, leaving a funding gap of $13 million that needs to be filled, which staff say can't be filled through the current fundraising strategy.
Regional District of North Okanagan staff presented GVAC members with two options for obtaining the needed $13 million: long-term borrowing over 20 years, or short-term borrowing over five years. GVAC decided to go with the short-term option.
The short-term borrowing is in addition to the $28 million that voters previously approved to be borrowed for the project. That means a total of $41 million will be borrowed.
The regional district is able to borrow the additional $13 million over a period of five years without having to go through a public approval process such as a referendum, which would have been required if the option for long-term borrowing was chosen.
"The shorter the term, the higher the tax impact but the less interest paid," reads a staff report. "Accessing short-term funding options would reduce uncertainty of project completion and ensure that the project proceeds as quickly as possible, mitigating risk of additional cost escalation."
So far, only $5 million has been raised through fundraising efforts, but GVAC members emphasized that those efforts should not cease even though more borrowing is being pursued.
"I would like to work together and start fundraising as well, so that we don't have to continue with a large tax increase that might be unmanageable for some families in the area," said GVAC member Ruth Hoyte.
GVAC chair Bob Fleming echoed Hoyte's comment, saying he hopes "the impetus for fundraising doesn't just disappear."
To cover the total of $41 million being borrowed, taxes are expected to increase by $85 per year per household for eight years beginning in 2025, and then $57 per year per household for the following 15 years.
GVAC members also passed a motion to have staff bring back a report on how much money is available from the RDNO's reserves, to get a better picture of the regional district's financial position.
"We're borrowing from reserves. We'd be remiss if we didn't actually know where it's coming from and what shape reserves are in the regional district," said member Jim Garlick, who put forward the motion.
Fleming ended the meeting by saying GVAC's resolution should give "everybody some hope" about the project that was previously mired in uncertainty.
