Cape Breton municipality forgives $172K loan for North Sydney rink
Councillors were divided over whether to write off loan for Emera Centre Northside
Cape Breton regional council has approved a controversial request to forgive a $172,000 loan to North Sydney's main recreation facility, but not all councillors agreed with the decision.
"Look, I've got a rink in my community that's doing the same thing, suffering, and I'm sure if I was to give them $172,000, they'd be quite pleased," said Coun. Lorne Green, one of several who opposed writing off the loan to the Emera Centre Northside.
In 2011, the non-profit Northside Community Civic Centre Society that runs the arena fell short of its $1.5-million fundraising goal to get the $12-million facility built.
The society had to borrow $230,000 from Cape Breton Regional Municipality (CBRM) to cover its share, but in 2017, it stopped making payments and left a balance owing of $172,000.
The society now needs grants to keep going during the pandemic, but CBRM policy is to deny funds to anyone who owes the municipality money.
"What's to say that we're not going to be back here in a year's time, or two years' time, doing the same thing again, when they can't continue to operate the building?" Green said Tuesday, on the first of several days of detailed budget talks.
Deputy Mayor Earlene MacMullin, whose district includes the centre, said staff have already deemed the loan uncollectible, so erasing it will not affect CBRM's finances.
Writing off the loan is also something positive council can do for community volunteers during what are regularly difficult budget deliberations in the cash-strapped municipality, she said.
"Right now, as a council, we have the opportunity, without having any negative effects on our go-forward budget, to help these guys out and put them on a level playing field and actually appreciate the work that was put in," MacMullin said.
"I just hope everybody just remembers what's on the table. It's the ... portion left from the original build, that we financially can afford to do, which after what you will see today and what you will see tomorrow, that's not something we actually get to say very often."
MacMullin also said forgiving the loan would allow the arena operators to apply for grants.
"It's just so that on a go-forward as money is needed, if the Zamboni breaks down, if there's an air-quality issue, whatever the deal may be, that they have the ability to apply for that relief like everybody else."
Several councillors agreed with Green, saying they were concerned about the possibility of other recreation groups seeking loans.
Council was told the Bayplex in Glace Bay was the only other facility to have received a loan from CBRM, and it failed financially several years ago before the municipality could collect on the debt.
Coun. Steve Gillespie said he supported writing off the Emera Centre's loan, despite CBRM's experience with the facility in Glace Bay.
"The worst part of what happened at Bayplex wasn't the fact that we had to eat a couple of hundred thousand dollars in a loan," he said. "It was that we had to take it over and we had to rebuild it and it cost us $4 million to do so."
Others pointed out that forcing the North Sydney group to repay its loan might end up with the municipality owning another building and then being responsible for it entirely.
Councillors Steve Parsons, James Edwards, Darren O'Quinn and Lorne Green voted against the request to erase the loan.
The remaining council members, including the mayor, voted in favour.