Guelph-Eramosa Township plans to deplete its Rockwood Hydro Fund by 57% this year to cover capital projects included in the 2014 budget.
But township officials stress the majority of the $865,625 total withdrawal from the fund will be repaid over time.
If council approves the 2014 draft budget as presented at a public meeting last week, the township will cover the following projects with the hydro fund reserve:
– $20,000 for lighting at the Rockwood parking lot;
– $35,000 for drainage work as part of the Rockwood Cemetery expansion;
– $375,000 for the acquisition of land to expand Rockmosa Park; and
– $435,625 to expand the Rockwood library.
The hydro fund reserve had a balance of $1,518,778 at the beginning of this year, meaning the combined withdrawal of $865,625 will leave a balance of $653,153.
However, finance manager Linda Cheyne said a large portion of the borrowed money “will be repaid with interest” to the hydro fund.
She explained the $435,625 for the library expansion will be repaid over a ten-year period with $2.5% interest, largely through increased lease payments from the county, which operates the library out of the township-owned building.
The $375,000 land acquisition “will be repaid with revenue from the sale of surplus lands,” Cheyne added.
Mayor Chris White said residents may see this year’s withdrawals as significant, but he noted they are largely a result of timing, with the land purchase and library expansion falling in the same year.
“We’re borrowing from ourselves, essentially,” White said, noting the 2014 transactions meet the initial intent of the hydro fund.
He noted Guelph-Eramosa is in a much better position than those municipalities that immediately spent their entire windfall from the sale of municipal hydro companies.
“I think it’s a good use of the fund to invest it in the community,” he told the Advertiser. “And we’ll try to get as much money as we can back in there for the future.”
The Rockwood Hydro Fund was created in 2000 following the township’s sale of Rockwood Hydro to WEDCO (Wellington Electric Distribution Company Inc.) for $1.76 million.
Council at the time decided to save the money and use it going forward for capital projects in the Rockwood area.
The fund balance has fluctuated over the years, as it has been used to pay for various items, including:
– the Rockmosa splash pad ($135,000);
– leasehold improvements for the Rockwood Medical Centre ($329,756); and
– recent Rockwood sidewalk upgrades ($180,032).
