Meaford Council is approving a by-law to authorize an internal agreement for a $1 million loan to pay off the costs associated with the Meaford public library.
During a council meeting on July 11, a report was brought forward by Director of Financial Services Valerie Manning recommending approving the $1 million loan funded through development charges.
Director of Community Services Matt Smith says currently, they do not have the $1 million in the library section of the development charges reserves as funds come in from every house that is built and is spread out amongst roads and water.
“Only a portion of that development charge is dedicated to the library. So basically what we are doing, is borrowing money from ourselves, from our reserves to fund the actual payment that we need to cover the costs of the library. As we get more development charges, and more development over the next, 10, 15 or 20 years, then all of the portions of those development charges that are assigned to the library, will go against that debt,” says Smith.
Smith adds depending on the amount of development, if the area sees a massive amount and are able to raise the funds needed to pay off the $1 million, then they will do it as soon as they are able, but have set a timeline of 25 years to pay it off.
Smith says in a previous report in 2021, council approved directing staff to work in consultation with Infrastructure Ontario to draft the necessary loan document to finalize the long term debt for the library for a total amount of $2 million to be funded through the annual tax levy.
This was later adjusted at an April, 2022 council meeting to $1.6 million that would be paid through the tax levy over 15 years.
Smith says the total cost for the library was in the ball park of around $7 million, and the $1.6 million to be paid through the tax levy, accounts for an amount that was not previously in the library reserves. He adds that to pay for the $7 million library, about $1 million was raised through fundraising, $500,000 was paid through grants, and others from reserves the municipality had saved up for the project.
The report says the repayment of the internal loan will be covered by future development charges. The budget process will include the cost of the loan repayment of principal as well as interest, and will have no effect on the tax levy.
