Why the City of Mission is planning to build a new city hall (and not a hospital)

Health care isn’t the City of Mission’s job. Putting out fires is.

The news that the City of Mission wants to borrow millions of dollars to build a new fire station and buy a new municipal hall and caused some residents to angrily ask why it isn’t addressing problems at the city’s hospital instead.

The answer is simple: cities aren’t responsible for health care (or education, or transit improvements—other suggested spending alternatives).

But although a simple civics lesson explains why the city might not be using its financial heft to fix health care, there is still the matter of what Mission taxpayers will get for their $60 million-plus and whether it’s a good investment.

For the city’s politicians, if not all locals, the projects aren’t just necessary—they are too good to pass up. And one might have the potential to address a local theatre groups continued search for a home.

Overview

Mission’s big borrow-and-build plans seek to resolve two emerging challenges. But to proceed, they must be approved by council Monday at its next weekend.

The city says the new fire hall in the Cedar Valley neighrbouhood would be part of a larger public safety public that would consolidate various programs.

The new facility would be built in the north end of town, on a Dewdney Trunk Road lot the city acquired after green-lighting an industrial development just west of Mission Institution. The facility still needs to be built and would provide a headquarters for the local search and rescue organization, and the city’s forestry and emergency management departments. It is expected to cost up to $39 million to build. The firehall would be Mission’s fourth.

The city also has plans to spend $25 million to buy and outfit a new office building that it could use as its new municipal hall. That building has just been constructed and sits at the on the northwest corner of the Highway 7/Wren Street intersection. The city says the purchase would allow it to consolidate services and offices that are currently spread between two buildings. (One of those is located in downtown Abbotsford; the other is in the mostly rural north of the city, east of Mission Institution.) The purchase would include another building that Mayor Paul Horn says could host not just council meetings, but community events, meetings, and even small theatre performances.

To proceed, the plan must be approved at Mission council, which will discuss the project at its meeting on July 7.

Although council hasn’t given its final sign-off, land deals like those under consideration often come after staff consults with council at closed-door meetings from which the public is barred. That suggests, council has already given its tacit approval for the plans.

The finances

To finance the new project, the City of Mission plans to borrow $52 million. The rest will come from the municipality’s reserves. Those reserves include money set aside from fees levied against developers to account for the cost of providing services to new buildings. Of the Fraser Valley’s five large municipalities, Mission’s reserves are the largest in the region, when compared against its annual tax revenues.

The borrowing will not require the city to consult the public through a referendum because Mission will still have relatively little debt. Referendums—or alternate approval process that involves the public signing a petition in opposition—are required when a municipality seeks to borrow more than 10% of their annual revenue. That threshold was just doubled by the provincial government.

The borrowing for the new projects will leave Mission with debt equivalent to about 4.5% of its annual revenue.

As for the impact on taxes, the city expects that the borrowing would lead to an average tax hike of about 4.7% next year. That will be on top of projected tax increases that are necessary because of contractual obligatory wage hikes for city staff, firefighters, and police. At a recent meeting, staff suggested homeowners could be looking at a 7% average tax increase.

The project won’t result in future tax bills having similar year-over-year increases—but only because the ongoing annual costs will already be built into each year’s taxes.

The project will be financed by a loan from the Municipal Finance Authority, the BC organization that lends money to municipalities. Horn said the city expects to pay interest of around 4%, with repayment due after 30 years. The city can also pay down the debt earlier, if it is able to do so—potentially by selling the sites it is vacating.

The deal—and the other properties

Horn said the projects are necessary right now, but that even if the city could muddle through now, addressing the space challenges at city hall now will be much cheaper than if the municipality waits.

Mission’s main city hall is nearly 70 years old, inaccessible to those with disabilities, and infested by bugs. City staff are split between the aging building and another downtown, on Welton Avenue. And even then, Horn said the two locations don’t have enough space for all the city’s staff.

Horn said that means the city would have needed to acquire new space one way or another, and that the deals on offer are better than will be possible in the future.

“We can live with the fact that the building is infested with every insect you can imagine, that the heating system has a difficult time keeping up,” he said. “All of that we could live with, but we can’t live with the fact that we literally don’t have enough room for staff right now.

“So the question for council [will be]: is there something that we think we are going to get a better deal on?”

Horn said the new city hall would be bought for about 80% of market value and will allow staff to be consolidated in one location. The city hopes that will allow the to either use the two sites for additional projects that would otherwise require land or by selling the properties.

The city says commercial real estate agency Cushman & Wakefield has pegged the combined value of the two sites at $16.3 million.

“We’ll talk with local community groups about this and get their input in terms of what they would like to see us doing with these properties in the short term and in the long term,” Horn said. “But there’s no question they have other values, both financially and in terms of social impacts.”

If the city sells the properties, the proceeds could be used to pay down the debt on the new buildings.

The leaks

Council’s decision to proceed this week comes after word surfaced in the community that the city was considering borrowing money to buy a new city hall. That brought criticism about a lack of consultation.

Horn said the city couldn’t discuss the deals publicly without jeopardizing its negotiating positions. He said that there had been two previous “leaks” about the city’s quest for a property, and that one led potential sellers to increase the selling price of a potential acquisition. In the other case, he said a member of the public attempted to purchase a property before the city could do so.

The theatre?

The city hall purchase will also bring the acquisition of a smaller nearby building that Horn says can both host council meetings and community events, banquets, and “small theatre performances.”

That possibility is of particular relevance in Mission, where Opening Nite Theatre, a local community theatre organization, has been unsuccessfully searching for a new home since a building inspector barred its long-time home from hosting audiences.

Mission staff haven’t confirmed that the site will work for the theatre group. But Horn said it should allow various groups to access space that is currently unavailable.

The decision

Mission council will vote on the plan at its meeting today, July 7. If council gives the thumbs up, the city will then proceed to seek approval for the loan from the Municipal Finance Authority.