SCUGOG: The Township recently took the next step towards creating a new high speed internet service for the municipality, pre-approving over $7.6 million from next year’s municipal budget to be spent on the project.
At their meeting on Monday, Oct. 19, councillors passed a motion to pre-approve $7,689,824 from the 2016 budget for the project. The funds will be used to help create a Municipal Services Corporation and Internet Services Provider. Council also agreed to file for a debenture from the Region of Durham for a total of $7,100,000 to fund the Scugog Island portion of the project. The debenture would pay over $1,250,000 in short-term debt financing over a term of five years and then almost $6,000,000 in long-term debt financing over a term of 20 years.
However, Ward 4 Councillor Wilma Wotten questioned the costs of the project.
“My concern is that when we started talking about this project, it was going to be $6,775,000, and now I read that the total financing costs for fibre optic based broadband is approximately $9,012,338,” Councillor Wotten said. “My concern is, do we know what the overall costs are? Because everything I have read said this had to be managed tightly to come in budget. What happens if it doesn’t?”
Project manager Laura Bradley explained that the municipality will not know the costs until they go to a request for proposal (RFP) model to allow businesses in the industry to bid to provide the service.
Regional Councillor Bobbie Drew questioned whether Scugog could decide to not take the debenture from the Region if the municipality were to change its mind on the project. Scugog Treasurer Trena Debruijn responded, saying that there is “an off ramp” for council.
“We can make the request, the region would go to the market to seek money on our behalf, but if council decides they’re not going to take it, they just won’t take it,” explained Ms. Debruijn, later adding that the township would likely not be on the hook in the early years for the full amount they would have to pay the region back per year, as the project would generate some income to help offset those payments.
Mayor Tom Rowett noted that based on the numbers expected for the municipal high speed internet project, it is estimated to be cash flow positive in year two and self sustaining by year three.