City Clarifies Arena Borrowing Bylaw

November 10, 2011

A clause in a borrowing bylaw that received first reading from City Council on November 9, 2011 does not represent an increase in current taxes to pay for the land and design costs for a new downtown arena.

The clause outlines how the City proposes to use revenue from lease payments, a ticket surcharge, a community revitalization levy and parking revenue to pay for the new arena. It also notes in the event of a revenue deficiency, the City shall levy and raise municipal taxes sufficient to repay the loan.

“This is required and mandatory wording that must be included when borrowing from the Alberta Capital Finance Authority. We do not have any intention of increasing current taxes to pay for the arena and we apologize for any misunderstanding that may have resulted from the bylaw,” says Lorna Rosen, Chief Financial Officer. “Council passed a motion in 2009 that clearly stated that current taxes could not be increased and resources reallocated from other capital projects to pay for a new arena.”

The City has agreed to contribute $125 million towards design and construction of the $450 million downtown arena. That money will be raised in part from a CRL, reallocation of the subsidy currently paid on Rexall Place, increased parking revenues and other sources. Costs for the land and other public infrastructure to support the arena site are not included in the $450 million.

The Alberta Capital Finance Authority is a non-profit corporation that has been created to provide local authorities (municipalities) in Alberta with flexible funding for capital projects at the lowest possible cost.