The city is being asked to set aside — either through a loan or financing through reserves — $6 million to cover part of the funding being raised through the public for the new multiplex.
No doubt the critics will be all over this. But the request is for money that has to be paid up front for construction costs while it will be recovered over the next few years in pledges.
Pledges have always been a viable means of fundraising. People want to be part of the future of the city, they are willing to put up money to support projects they believe in. But they are not always in a position to pay it all up front.
But those building the facilities want to be paid up front, of course. So while a pledge means the money is coming, it won’t be here on time for the contractors.
So the city, which will own the facility, is being asked to front the money. It’s not all that unusual of a request.
The city would have the option of borrowing the money from a financial institution at a favourable rate, or taking the money from reserves and losing the interest being paid on that amount.
Either way, the money gets repaid.
