Sparwood Mayor speaks to Fire Hall #2 expansion
Dear Residents and Property Owners:
RE: Fire Hall #2 – Renovation and Expansion Project.
I am taking the time to write to you in order to clarify and respond to some of the statements and opinions being expressed about this project in the public and media, as you are being asked to consider your support for borrowing $5 million towards the renovation and expansion of Fire Hall #2.
Fire Hall #2 was built in 1982 to provide garage space in support of enhanced fire protection of the expanding Sparwood Heights development. Since that time, only modest improvements and capital investments have been made to the facility, including the exhaust system, cold storage, mezzanine enclosure, and the communications radio tower with repeater equipment to provide increased communication coverage.
Over the years, these small improvements have totalled less than $180,000 in capital expenditures, and at no time in the last decade was a one-time capital investment made in the facility totalling $200,000
Over the last 40 years, the suitability and usability of Fire Hall #2 has decreased. The aging facility has been discussed by council and staff going back as far as 2009 in conjunction with the projected Whiskey Jack development.
In 2010 there was a resolution to proceed with the Fire Hall #2 project (in 2011), which was ultimately deferred due to funding concerns. Although the need to address Fire Hall #2 has been considered and deferred on many occasions, it has been a part of the 20-year capital plan since that time.
The existing Fire Hall #2 is designed to serve as a garage type facility and does not meet modern day fire station design with respect to appropriate equipment isolation and cleaning facilities, washroom and shower facilities, adequate storage for larger fire apparatus, and having enough room around the vehicles to complete equipment and safety checks.
As an example, a vehicle that is intended to be stored at Fire Hall #2 under agreement with the RDEK must currently be housed at Fire Hall #1. The proposed project will address these concerns and provide a safer exit and entry route for apparatus.
Ultimately, it will allow for Fire Hall #2 to serve as a proper fire station. The importance of having both Fire Halls for reducing response and travel times is touched upon in the 2012 study conducted by Smith Brownlee & Associates.
If the proposed Fire Hall #2 project is approved to proceed, the intention of the district is to seek bids for design-build of the project and enter into a fixed price contract. The request of design-build bids, use of fixed price contracts, and inclusion of a reasonable project budget contingency will help mitigate any cost overrun concerns.
Given the size and nature of this project, as well as the reasonably low 10-year fixed interest rates available to the district (currently at 1.95%), it was deemed prudent to fund this project through long-term borrowing.
Council acknowledged this when it approved budget “Guideline 11 – Debt” in October 2020. The budget guideline explains that the district currently has funds in the bank available for investment, and with a low-risk investment return estimated of one to 1.6% the cost of borrowing could essentially be offset by investment returns. Another important consideration is that this facility will serve the community needs well into the future, and if the community experiences any growth during that time individual tax bills will also decrease. So while the Ministry requires the municipality to estimate the cost of borrowing in the Loan Authorization Bylaw at an estimated 30-year interest rate, the actual term of borrowing, interest rates, and impact of borrowing can change.
As for overall debt, as of December 31, 2021 the district will only be paying for the Michel Creek Road water line extension, which has offsetting revenue from a parcel tax that was implemented when constructed. The annual debt servicing cost of the Fire Hall #2 project would amount to approximately 10% of the District’s total borrowing capacity, leaving significant room for other planned or emergency projects.
Finally, the suggestion that the regional coal industry is unstable and should prevent council from considering borrowing long-term for any project is a scare tactic that does not negate the need for proper asset management and financial planning.
There are many factors at play in the coal industry, and each company, project, and region is unique. The presence of existing mines, and the number of requests for new mines and expansions, speaks positively to the strength of the coal industry in this region.
I hope this provides further context with regards to the importance and feasibility of this project. However, should you have any questions regarding these matters, please contact Fire Chief Dean Spry at [email protected]
– David Wilks is District of Sparwood Mayor