UPDATED – 1
The Good Shepherd Centre is requesting a $5-mil interest free bridging loan to assist the organization while they await pledged donor dollars for the now completed $55-mil Good Shepherd Square affordable housing complex on King West between Ray and Pearl.
The complex includes social services and attracted some NIMBYism during planning. Now completed, the complex is an asset in the community and one of the more visually attract properties on the King West stretch.
The Good Shepherd ran a successful fundraising campaign for the site and they are now awaiting those donations to arrive. In the meanwhile, they face a financial crunch and turned to the city for an interest-free loan.[module align="left" width="half" type="aside"]
City Council voted to refer the request to the Future Fund Board for consideration
It’s a good cause, but granting a charity an interest-free sets a precedent of providing loans to charity and absorbing the interest costs because the City itself must borrow money to provide the loans.
$5-mil from Future Fund?
Ward 3 citizen and former council candidate Paul Tetley, in an email to council last night, suggests using the $5-mil allocated for the now-defunct velodrome to fund the loan. It still sets a precedent, but there are no interest costs to the city in this scenario.
Here’s Tetley’s email in its entirety and original formatting:
Dear Mayor and City Councillors,This weekend it was brought to my attention that at tomorrow’s GIC meeting (July 9, 2012) the Mayor and Council will be discussing the Good Shepherd’s request for a $5 Million dollar interest-free 5 year loan. See Discussion Item – 8.1 http://www.hamilton.ca/NR/
rdonlyres/44BA144D-605A-41DE-. 800B-F83D93370435/0/ Jul09EDRMS_n327460_v1_8_1__ FCS12035_Good_Shepherd_ Centres_Loan.pdfI’ve read the staff report in great detail and believe that one funding option for the interest-free loan has been overlooked.As recently reported by The Hamilton Spectator, the Hamilton Future Fund has committed $5 Million to the PanAm velodrome. Since the velodrome is no longer proceeding Robert Rossini has stated that money is “lying in limbo”, http://www.thespec.com/news/ local/article/753361–. hamilton-future-fund-asks-for- its-money-backAs the $5 Million committed to the velodrome exactly matches the $5 Million requested by The Good Shepherd, my suggestion is as follows; Should council decide to provide a 5 year interest-free loan to the Good Shepherd, the $5 Million Future Fund money previously committed to the velodrome should be re-directed to the Good Shepherd requested interest-free loan.Re-directing the Future Fund committed money of $5 Million would serve taxpayers and the city in three significant ways;1. It would avoid lost interest of approximately $1.1 Million over 5 years (see Page #3, Report FCS12035) - http://www.hamilton.ca/NR/ rdonlyres/44BA144D-605A-41DE- 800B-F83D93370435/0/ Jul09EDRMS_n327460_v1_8_1__ FCS12035_Good_Shepherd_ Centres_Loan.pdf2. It would avoid interest charges of approximately $600K over 5 years if the $5 Million was borrowed at the City’s preferred interest rate (see Page #4, Report FCS12035 -http://www.hamilton.ca/NR/ rdonlyres/44BA144D-605A-41DE-) 800B-F83D93370435/0/ Jul09EDRMS_n327460_v1_8_1__ FCS12035_Good_Shepherd_ Centres_Loan.pdf3. It would prevent the potential of deferring capital projects by transferring the $5 Million from “available funding” (see Page #3, Report FCS12035) - http://www.hamilton.ca/NR/ 800B-F83D93370435/0/ Jul09EDRMS_n327460_v1_8_1__ FCS12035_Good_Shepherd_ Centres_Loan.pdfI believe the above proposal should be seriously considered should council decide to fund the Good Shepherd’s request for an interest-free loan.Thank-you for your time and for considering the above.Sincerely,Paul Tetley
What do you think? Should the City be making interest-free loans to charity? Should we be using the Future Fund monies for this purpose?