by CONNIE TABBERT
Editor
COBDEN — Whitewater Region council has not yet made a decision as to whether or not it will financially help a developer with infrastructure funding for the former Century Milling property located at the corner of Wallace Drive and Hwy. 17 (Pembroke Street West).
Bonnechere Excavating Inc. (BEI) representatives Matt Naismith and Mark Enright have been making presentations to Whitewater Region committee and council meetings with the current and former council members in regards to constructing the newest facility for Whitewater Brewing Company, which is now under construction on the former Century Milling property.
BEI has asked council to financially help with extending water and sewer lines to the new facility, approximately 250 metres, and with the left hand turning lane the Ministry of Transportation has requested.
The most current meetings occurred last Wednesday and Thursday.
Following those meetings, Mr. Naismith feels positive about an outcome that is beneficial to BEI and the municipality.
This is not a unique situation or ground-breaking, he said. There have been similar-type requests in other areas of the province, he noted.
Eventually, the township will take over the water and sewer lines, Mr. Naismith said.
Mr. Naismith is not surprised by the concerns raised by council, because it has to be accountable to all the taxpayers.
“They have to be extremely concerned where they spend taxpayers’ money,” he said. “It has to be agreeable to the majority of all taxpayers.”
BEI is committed to development in Cobden, which will help the taxpayers as well as business, Mr. Naismith said.
Whitewater Region Mayor Hal Johnson, who is employed by BEI, said in the 14 years since amalgamation, “there have been no real steps taken for economic development” in the township. While he hasn’t been in attendance at all the meetings due to declaring a conflict of interest, he said this specific project will provide 30 new jobs.
“That is another 30 families with an income in one spot,” the mayor said.
He believes with a business plan in place, the financial help would be doable and the township will recoup all its financial assistance.
Chief Administrative Officer Christine FitzSimons said council is seeking “expert legal advice” on this matter because there “are a lot of things council is allowed and not allowed to do.
“It gets complicated,” she added.
In most instances, the developer absorbs the costs of infrastructure when they are developing property, she said.
“BEI is asking the township to help with costs either directly or indirectly through a grant or loan,” CAO FitzSimons said.
Part of the question to be answered with this request for financial assistance, is “are you willing to invest in future growth for economic development,” she questioned.
CAO FitzSimons said she has “limited experience in the realm of development” and “Whitewater Region has not had exposure to large-scale commercial development.”
During last Wednesday’s meeting, Mr. Naismith and former council member Joey Trimm spoke about this issue.
Council seemed to be concerned, at a previous meeting, with the cost of installing water and sewer lines and making necessary highway adjustments regarding the brewery project, Mr. Naismith said.
“We at BEI have come to understand some of the concerns associated with the township being asked to be involved with sharing costs of this development,” he said.
He discussed various options to address the concerns which will allow the municipality to be directly involved in the growth of Cobden.
Development is expensive and with the current population base in this area it is “unrealistic and unreasonable to expect small businesses to come into the area and bear the full weight of the development expense,” Mr. Naismith said.
To solve that problem, the population base needs to be increased and to do that, there has to be reasons for people to want to move to the area and stay in the area, he stated. Those reasons are jobs, services and attractions, he added.
With the current size of Cobden, as well as Whitewater Region, Mr. Naismith said that won’t happen easily. However, if council has a direct hand in providing assistance, it can be accomplished, he said.
“BEI is highly motivated to be involved in development in Cobden and Whitewater Region,” Mr. Naismith said. “To us growth means more jobs available in the area, providing opportunities to keep the young people in the region and providing the municipality with the ability to make changes and improvements they know are required.”
An estimated cost of the work to be done is in the $470,000 range, he said. The various options of providing financial assistance through cost-sharing was provided by Mr. Naismith.
Council members had questions and statements regarding the issue, however, no decision was made.
Mr. Trimm said he understands BEI’s presentation was that it was an investment in the township. But, it’s no more an investment than all property owners have made in the township, he added.
“The problem I have with their presentation is the anticipated dividends,” he said. “I don’t believe that what they see as dividends to the municipality is what we would actually see in fact.”
He noted he was making his presentation based on the total estimated amount of about $470,000 and not the one-third proposals presented prior to his presentation at Wednesday’s meeting.
Any money that goes to a development, or this development, is not an investment, it’s a donation, because the municipality is not getting anything back, Mr. Trimm said.
He then questioned if other developers in the community, such as the Vereykens and Delmar Lavallee, would get the same treatment.
“They have paid for all the upfront services,” he said. “If the township is considering making donations, as (Councillor Cathy Regier) said (earlier in the meeting), they might be lining up for one as well. I wouldn’t blame them.”
Mr. Trimm questioned where the money will come from if the municipality is not going to recoup the money from BEI.If taxes are to be raised, it would be in the realm of about 14 percent , along with the yearly rate, which is around three percent , he noted.
If it’s not through raising taxes, then it’s by robbing other budgets within the municipality, and usually it’s the public works budget, he said. Noting the municipality needs to put a minimum of $2 million into the roads just to bring them all up to a certain standard, that’s not going to go well with public works manager Bill Misener or the ratepayers, he added. Mr. Trimm explained he was referring to the roads- needs study completed by a consultant for the township a few years ago.
If it’s not by cutting services in other budgets, then it’s by borrowing the money, he said. This can be done through local improvement initiatives, but it’s not a usual way. Local improvement initiatives are usually for large subdivisions, because there is less risk the money won’t be repaid back, he said. Explaining, he said loaning money to one or two people (developers) is much riskier than to a 75 to 100 house subdivision.
He recalled various businesses that came into the municipality (including the former municipalities prior to amalgamation) and closed down, leaving those municipalities with a lot of money that will never be collected.
“When businesses go bankrupt, you don’t drop the amount of taxes they were paying,” Mr. Trimm said. “Everyone else absorbs it — that’s the way it works.”
He agreed that it’s a big benefit for any municipality when industry and development occurs, but there is also a risk.
“All of you can point to businesses that have lasted a long time, of course, but I can point to businesses that didn’t,” he said. “It’s a risk. All municipalities are willing to take on that risk, definitely, but are you willing to take on a further risk in the form of a loan or are you willing to put that risk on a group of other ratepayers who are already struggling to pay for their services? That doesn’t make sense.”
Mr. Trimm added while there may be benefits to financially assisting a developer, he stated, “One bad decision can wipe out the whole benefit.”
If council agrees to loan the money to BEI, Mr. Trimm said it has to consider the township’s borrowing limit. And, he reminded council, within the next year or two, it will need to borrow $3 million for upgrades to Cobden’s sewer plant.
While the municipality does have room in the borrowing limit, Mr. Trimm said, “The reason why you have that room is because of the prudence of previous councils.”
Development is important, but there must be sensibility behind the type of development, he said. Whitewater rafting will not work for Laurentian Valley while Home Depot would not work for Whitewater Region, he said.
“We can’t put ourselves in debt at severe risk just for the sake of saying we brought in development,” Mr. Trimm concluded.
