What is happening?
The District of Summerland is planning to build a new facility for our local RCMP detachment, because the existing RCMP building:
Why build it now?
A new RCMP facility for Summerland is a community priority (2009 community survey).
The existing RCMP facility is in terrible condition, is too small for the size of the Summerland detachment, and does not meet current RCMP security standards.
We have considered several options and the most cost-effective long term solution is to build a facility that has been designed to meet the current and future needs and requirements of Summerland RCMP.
The timing for building a new facility is good, given the current economic climate, with more favorable financing rates as well as competitive construction bids.
What will it cost Summerland homeowners?
We expect to finance most of the construction costs through the Municipal Finance Authority. The taxes required to pay these costs will be approximately $11.00 per thousand dollars of assessment. Therefore, a property with an assessed value of $400,000 will pay $44.00 more in property taxes. This amount is likely to decrease over time as the total assessment values for Summerland grows.
What alternatives to constructing a new building were considered?
Council considered a number of options including:
The main drawback to amalgamating with the Penticton detachment would be the loss of a police presence in the community which our citizens have indicated that they wish to maintain.
A neighbourhood policing office in Summerland with all the administration and records being handled out of the Penticton detachment would require approval from the City of Penticton and there would be a cost for Penticton to handle administration in addition to the cost of establishing and fitting the neighbourhood policing office.
Major renovations to the existing building would be as costly as constructing a new building, given new RCMP security standards, and we would still be left with an old building with an limited useful life.
Where are we at today?
Council has purchased the land required for the new facility, and has reviewed concept drawings for the facility as well as the preliminary cost estimate for construction of the building.
What Will It Cost?
The estimated cost of constructing the new building will be $4.5 million including a contingency allowance.
We are proposing to pay the cost of the building partially from the Municipality’s Reserve Funds and a small grant from the Province of BC leaving a balance of approximately $3 million to be funded by a loan from the Municipal Finance Authority.
If we borrow the funds for the construction reasonably soon we will be able to take advantage of the current low interest rates. Our loan would have a fixed rate for ten years and we estimate that the rate will be approximately 5%.
We could finance the loan over a 20 to 30 year period but staff are recommending that we finance it over 20 years in order to keep the interest costs to a minimum.
The annual payments over a twenty year period would be $261,193 and they would be $231,287 over twenty five years.
Using a house with a value of $400,000, annual property taxes to pay for the loan payments would be $44.00 annually over twenty years. If we stretched the payments over twenty five years we could lower the annual cost to $38.96 for this same home but the additional interest we would be paying over the five extra years would be $750,000.
A house valued at $300,000 would pay $33.00 of additional taxes if we financed the loan over twenty years.
How can I get more information?
If you have any questions or comments about the new RCMP building you can contact Ken Ostraat at the Municipal Hall at (250) 494-6451 or email kostraat@summerland.ca
