Whatever anyone might say about the Big Dig, no one can complain about the usual gripes of being over-budget and late.
CAO David Denault spoke to Midland council during a recent meeting, regarding a debenture bylaw pertaining to a the second tranche of borrowing on the King Street Reconstruction Bayshore to Yonge project, also known as the Big Dig.
“Being on time with a project of this significance is in itself quite an accomplishment,” said Denault. “The fact that it was done during a pandemic was absolutely stellar. And now what you’re hearing is that project was under budget.
“If there was a trifecta of projects in terms of project excellence, I think this one hits it out of the ballpark.”
Last year, council approved debenture financing of an amortized loan of $14 million with Infrastructure Ontario (IO). Shortly after, council approved the first portion of the loan, or tranche, of $12 million for the Big Dig. Earlier this month, negotiations with IO concluded with the acceptance of an interest rate offer.
CFO Michael Jermey stated that the staff recommendation of a second tranche of $900,000 with 3% aggregate rate would be the end of the debt financing on the project.
Mayor Stewart Strathearn asked Jermey what the aggregate rate was for last year’s $12 million tranche, and when given the response by Jermey of 2.15%, Strathearn replied, “that’s pretty good”.
Andy Campbell, executive director of environment and infrastructure, noted that various costs from construction, consulting and other trades on the project could have been estimated higher before actual costs came in.
“Our original budget approved by council was $14.06 million, and right now I’m thinking we’ll be $700,000 under that budget when we’re done,” said Campbell. “We might be a little better than $700,000 but we still have some warranty work and some final cleanup, and a couple other outstanding issues that we’re trying to resolve.”
CAO Denault praised the Big Dig as possibly “the most impressive project that this town has… undertaken” and thanked staff for responsibly managing the project for taxpayers, adding that through the finance team under Jermey and town solicitor/executive director of corporate services Tina Lococo, “we secured historic low rates to finance this.”
“I think a lot of people deserve credit, including council who had the courage to support our businesses in doing this type of revitalization,” said Denault. “But we still need to pay for it.”
Annual repayments are estimated at $50,600 resulting in roughly 30% of the town’s annual repayment capacity being used, well within the town’s debt capacity as established by the province, with first payments on the debt to come due in 2022 and to be included in the budget.
Information on the debenture bylaw (King Street) second tranche can be found on the town of Midland website agenda page.
Council meetings are held on the first and third Wednesdays of each month, and can be viewed on Rogers TV cable channel 53, or through the livestream on the Rogers TV website. Archives of council meetings are available through Rogers TV and on the Town of Midland’s YouTube channel.
Derek Howard, Local Journalism Initiative Reporter, MidlandToday.ca