Town of Grimsby staff are exploring options to fund part of the cost of the Southward Community Park on Mud Street.
The cost of the park is an estimated $6.25 million, part of which will come from reserves, development charges, tax levy, and community funding. The Recreation Services Committee recommended the Town debenture just over $2 million over a ten-year period. However, at a special meeting Tuesday night, July 8, council rejected that notion opting to seek a shorter term colution.
“My concern is to pay back the $2 million over 10 years doesn’t make a lot of sense. I think we go about it a little quicker than that,” said Ald. Steve Berry, adding that a shorter pay back period could save the town money in interest.
Director of finance Steven Gruninger explained that the debenture is offered through the region and the 10-year finance plan is the minimum pay back period allowed.
Berry suggested staff review other options such as utilizing the Town’s line of credit.
However Gruninger explained that, although they do have the over $2 million available on the line of credit, it is meant for short-term lending only- months, not years.
“Could we look at getting a variable rate loan through our bank?” suggested Mayor Bob Bentley.
Gruninger explained that a bank loan would likely have a higher interest rate, but Ald. Joanne Johnston pointed out that even at a higher interest rate, if it’s paid over a shorter period of time, it could save the Town some money.
Ald. Carolyn Mullins agreed that seeking a 5-year loan from the bank would be a better option.
Gruninger will be following up with the Town’s bank to see what kind of interest rate could get given for the five-year, $2 million loan.