Councillors are dealing with “sticker shock” over both the roughly $100-million cost to create Bradford’s new town hall as well as about $5 million to operate it each year.
That came in response to presentations from Ronen Bauer and Diarmuid Nash of Moriyama Teshima Architects (MTA), as well as Ian Goodfellow, the town’s director of finance and treasurer, during council’s new strategic initiatives committee meeting on Monday evening, Oct. 7.
MTA had estimated the total construction cost would be about $89.8 million with an overall project cost of $105.7 million, including, design, permits, furnishings and the roughly $4.1 million the town has already spent on land acquisition as well as legal and administrative work.
However, based on committee’s decisions for design options made during that same meeting, chief administrative officer Geoff McKnight estimated the total construction cost would be reduced by at least $5.5 million, taking the total estimated project cost to slightly more than $100 million.
Those costs were still a bone of contention for several councillors, including Ward 7 Coun. Peter Dykie.
“What’s wrong with what we have now?” he asked.
Dykie said he was trying to not be negative and praised staff and the architects for their work on the project, but stressed that interest of five per cent on roughly $100 million would be $5 million each year with the potential to increase taxes “tremendously.”
Ward 3 Coun. Ben Verkaik echoed those concerns.
“The cost is sticker shock,” he said, but also noted “the best time to build is when the economy is slower.”
Terry Foran, director of recreation and cultural services, pointed out that comparable projects in other communities are facing similar construction costs of $990 to more than $1,000 per square foot over the last 18 months.
“It’s shocking all of us I think, just how fast the construction costs have accelerated,” he said.
Minus parking, Bradford’s new town hall is expected to be about 99,000 sq. ft., and with the updated construction cost estimate of $84.3 million would work out to about $850 per square foot.
The treasurer presented a brief financial overview to help address some of council’s concerns, and while he didn’t have time to take into consideration the decisions made by council earlier in the meeting, Goodfellow explained “a project of this magnitude” would require the town to take on temporary borrowing during construction, replaced with long-term debt thereafter.
Luckily, rates have come down, and 20-year funding from Infrastructure Ontario is now available at 4.2 per cent, according to Goodfellow, who explained 15 per cent of the total project cost can be funded from recreation growth development charges, leaving about $90 million to come from long-term debt.
The cost to service the debt is expected to start at about $950,000 in 2025, but quickly grow to $6.8 million by 2026.
Even after projected revenues, as a result of debt servicing and other operating expenses, the project will require increasing the tax levy by about $677,000 in 2025, growing to a little more than $5 million by 2026.
That’s roughly ten times more than the $524,000 the town currently budgets annually to rent offices in Bradford.
While Goodfellow wasn’t prepared to estimate the impact for the average home, he did reveal that about 26 per cent of the total operating costs can be recovered from non-tax revenue.
To spread out the increase and avoid a large jump, Goodfellow explained the town has been including a special capital levy which increased the annual budget by $430,000 each year since 2019 (with the exception of 2021) to help pay for the new town hall and revised that increase to $730,000 from 2023 to 2031 to also help hire 20 more firefighters.
“I’m glad that council of the day and the leadership of the staff did go this route and start saving. Otherwise we would be looking at a lot more,” Deputy Mayor and committee chair Raj Sandhu said.
Earlier in the meeting, Ward 2 Coun. Jonathan Scott also noted the presence of grants for arts and culture that could help with the theatre as well.
In the meantime, Goodfellow said staff are working on a long-term financial plan, which would include not just the town hall and other facilities, but also water, sewer and roads projects.
“We’re going to be embarking on a plan to have a better understanding of those and what the options are to manage and mitigate those costs,” he said.
