The Resort Municipality of Whistler (RMOW) will loan $1 million to the Whistler Community Services Society (WCSS) to assist with rising construction costs on a new building at Nesters.
When it opens in April or May next year, the building will house the Re-Use-It Centre and all of the services currently offered in Spring Creek, while the Re-Build-It in Function Junction will move to the Re-Use-It's current location on Lynham Road.
But rising costs have pushed the project's budget from $2.1 million to $3.1 million, said WCSS executive director Cheryl Skribe.
"We got surprised in June. We found out that construction costs went up," she said.
"Building materials, cost of trades, U.S. dollar pricing — we priced out an elevator a year and a half ago that was $140,000, and then when the budget came in, the exact same elevator was $190,000."
The loan, which will carry a term of 30 years at an interest rate of 2.88 per cent, will be paid off through fundraising events.
"Our plan is to pay it off in the next five years," Skribe said, adding that WCSS will be doing some specific fundraising in the next six months and then one event a year in the coming years.
The shortfall is a setback after some tremendous support from the community, Skribe said, including $100,000 from the Whistler Blackcomb Foundation, $100,000 from Eve and Charles Chang and a $150,000 commitment from Nesters Market over 10 years.
The RMOW also contributed $850,000 by way of a grant, to be paid back over 50 years via the lease payments on the site.
"And then we had our own internal capital fund which we had $1.2 million in, which we had raised over the last five years operationally, and so we were in really good shape," Skribe said.
"Definitely, this was a setback and it sort of set us on our heels for a little bit but since then we've had a tremendous amount of support."
RMOW staff gave careful consideration to loaning the money, as the $1 million would typically be invested and earning income for the public fund, director of finance Ken Roggeman said in a presentation to council. But the 2.88 interest rate (the 10-year rate as posted by the Municipal Finance Authority) is favourable to the RMOW, he noted.
"Comparing what we currently have municipal money invested in, the longer term yield sort of in the 2020 through 2026 range is about 2.36 per cent on average, so 2.88 would actually be a little bit higher than that," Roggeman said.
WCSS provides invaluable services — like counselling, support programs, the food bank, Re-Use-It Centre and more — at virtually no cost to taxpayers, Roggeman said, but those services are typically outside the scope of municipal responsibilities, and the RMOW doesn't want to tie itself to long-term commitments.
"While doing this, the municipality is not taking on new responsibilities or committing to providing funding ongoing into the future, and there was some very valuable and strong considerations around why we would consider providing a loan," Roggeman said.
The building itself will serve as security on the loan, which is to be used only for construction costs and allows for early repayment.