Active Living Centre Referendum

The Province of British Columbia requires public approval of long-term borrowing. The City of Vernon is asking the public to approve borrowing up to $121 million to plan, design, and construct a new multi-purpose indoor recreation facility called the Active Living Centre. The facility would be located at Kin Race Track Athletic Park (3501 43rd Avenue).

"Are you in favour of "Active Living Centre Loan Authorization Bylaw 5908" which would authorize the Corporation of the City of Vernon to borrow up to $121 million dollars, with interest, over a period not exceeding 30 years in order to finance the construction of an Active Living Centre to be located at 3501 43rd Avenue?"

The proposed Active Living Centre is the result of recommendations made in the 2018 Greater Vernon Recreation Master Plan and subsequent Active Living Centre Feasibility Study. The Master Plan and Feasibility Study were informed by extensive public and stakeholder engagement, which identified:

• There is a need for new indoor recreation opportunities and facilities in the Vernon area, including a new aquatics centre, gymnasiums, fitness centre, walking/running track, and dedicated program spaces; and
• The Vernon Aquatic Centre no longer meets the current needs, and will not meet the future needs, of a growing community.
  
  

The proposed multi-use Active Living Centre includes: a 50m pool with two movable bulkheads (allows option to divide the pool into 3 activity areas or 2 x 25m swim areas); a leisure pool; hot tubs, sauna and steam room; double gymnasium with multiple sport courts; activity and program rooms; an 80-station fitness centre; and a 150m indoor synthetic walking/running track.

The Class D estimated cost to build the full Active Living Centre* is between $112M and $121M, which includes design, professional fees, construction and contingency. The cost was calculated by two independent Quantity Surveyors in 2022, and is based on anticipated costs in 2023.

*A full build out includes: a 50m pool with two movable bulkheads (allows option to divide the pool into 3 activity areas or 2 x 25m swim areas); a leisure pool; hot tubs, sauna and steam room; double gymnasium with multiple sport courts; activity and program rooms; an 80-station fitness centre; a 150m indoor synthetic walking/running track; and associated support amenities such as a lobby, change rooms and storage spaces.

At this time, the strategy is to ask the citizens of Vernon to support borrowing for the full cost of the Active Living Centre. However, to reduce the amount the City would have to borrow for the project, and to reduce the impact for Vernon taxpayers, the City is also actively pursuing major grant funding for the planning, design, and construction of the facility.* 

*The approval and distribution of grant funding is at the discretion of grant fund administrators.

At its June 9, 2022 Special Meeting, Council approved the following details and timeline to borrow funds for the planning, design, and construction of the Active Living Centre, if electors vote in favour of the referendum question: 

• Up to $121 million to be borrowed from the Municipal Finance Authority (MFA) over a four-year period (2023 - 2026)
  • Loan authorization amount: $121 million
  • Estimated interest rate: 4.23%
  • Estimated annual debt payments: $7,874,395
     

• 2023: Facility planning and design to take place, drawing $12 million from the MFA loan 
• 2024: Construction to begin on the facility, drawing $40 million from the MFA loan
• 2025: Construction to continue on the facility, drawing $40 million from the MFA loan

• 2026: Construction to be completed with an anticipated Fall 2026 opening date, drawing up to $29 million from the MFA loan
  
  

In addition to the strategy outlined above, private contributions and Fee for Service Agreements will be considered, as opportunities arise, in order to reduce the costs to citizens of Vernon. You can read the memorandum to Council that outlines the full borrowing strategy here.

For information regarding tax implications for Vernon property owners, please see the FAQ titled: If electors vote in favour of the referendum question, when will I see an increase in my property taxes related to the Active Living Centre project and how much is it estimated to be?

If electors vote in favour of the referendum question: 

• The City of Vernon will have up to five years to begin borrowing funds for construction of the Active Living Centre facility.
• The City is not required to borrow all of the funds at one time. Borrowing can take place as required during development of the facility. 
• The funding strategy, which was approved by Council at its June 9, 2022 Special Meeting, includes four consecutive years of cumulative property tax increases for the purpose of repaying the debt to develop the facility. 
• In 2023, the City will borrow funds from City reserves to make the first Municipal Finance Authority (MFA) loan payment.
  
  
• The first property tax increase related to the Active Living Centre project is expected to take place in 2024, with the following schedule:
  • 2024: 3.5% increase for debt repayment
  • 2025: 3.5% increase for debt repayment
  • 2026: 3.5% increase for debt repayment + 0.4% increase for facility operating costs*
  • 2027: 3.0% increase for debt repayment + 0.9% increase for facility operating costs
    

*If built, the Active Living Centre is expected to be open in the Fall of 2026, thus requiring additional funds for operating costs.

Below is a table that shows the estimated incremental and cumulative City of Vernon property tax increases for the development of the Active Living Centre. The dollar values are based on the 2022 average assessed property value of $611,523.

• No more property tax increases are expected after 2027 for the purpose of repaying the debt to develop the Active Living Centre facility.

The funding strategy for this project uses an approach that is similar to Vernon’s infrastructure levy program. Instead of implementing a single, double-digit property tax increase to pay for the new debt, Council has endorsed a plan to do smaller, incremental tax increases over four years, to help lessen the financial burden on citizens. After 2027, the City would have enough new taxes coming in annually to pay for the new debt (with interest) and repay the loan within the 30-year term.

To reduce the amount of money the City would have to borrow for the project, and to reduce the impact for Vernon taxpayers, the City is also actively pursuing major grant funding for the planning, design, and construction of the facility.

For information regarding the proposed Active Living Centre funding strategy, please see the FAQ titled: What is the financial strategy to pay for the Active Living Centre?

Yes, all possible grant and donation opportunities will be explored to help reduce the overall cost of the project. Grant availability is subject to change and is often a matter of timing. Grant approvals are at the discretion of the particular grant administrator.

Recently, the City of Vernon applied for a grant of up to $6 million, through the Canada Community Building Fund in British Columbia - Strategic Priorities Fund Capital Infrastructure Stream (CCBF Grant). The purpose of the grant application is to help offset costs associated with the proposed Active Living Centre project.

According to the CCBF grant administrator, review of applications and determination of approval is expected to take several months, so information on the status of the City's application is not expected to be available until the end of 2022 or start of 2023.

Based on public input, a single, multi-purpose recreation facility is the preferred option. It is estimated that $300,000 can be saved annually by operating one aquatic facility with a 50m pool instead of 2 separate 25m pools in different locations. By building the facility adjacent to Kal Tire Place, in the heart of the future Kin Race Track Athletic Park, additional cost savings and increased energy efficiencies can be realized by taking advantage of heat recapture technology; using the heat loss from the arenas to heat, in part, the new aquatic centre.

Yes, the Greater Vernon Recreation Master Plan was conducted by RC Strategies + PERC between January and October of 2018. The Master Plan was endorsed by Vernon City Council and the other elected officials in Greater Vernon in October 2018. The extensive public engagement and results of the Master Plan can be found here.

The Greater Vernon area includes: the District of Coldstream, Electoral Areas B and C, and the City of Vernon.

Yes, the Greater Vernon Active Living Centre Feasibility Study was conducted by FaulknerBrowns Architects between August 2019 and May 2020. The extensive public engagement and results can be found here.