The Town of The Blue Mountains has not yet identified a funding source for an $800,000 loan made to the Blue Mountains Attainable Housing Corporation.
At its committee of the whole meeting on Feb. 26, council received a staff report that outlined the status of the loan to the housing corporation.
In 2022, the town approved a loan to the housing corporation with an upset limit of $1.2 million, this was later reduced to $800,000 in 2023.
The housing corporation used the funds to operate during those years and to prepare for the Gateway housing project to be located at 171 King Street. That process was not successful and it became impossible for the housing corporation to repay the amount lent by the town as it had no revenue stream.
The town advanced the money to the housing corporation from its general cash flow, but on the books the loan remains “unfinanced.”
The report presented four options for council to consider:
- Defer a decision until a final decision on the future of the 171 King Street property is made. In this scenario, if council decides to sell the King Street property, the first $800,000 from the sale would be used to officially finance the loan.
- A one-time tax levy in 2025 of $800,000 to clear the loan off the books in one year. This option would see a four per cent increase added to the budget in 2025 to finance the loan. In 2026, that four per cent would be eliminated from the budget.
- Internal loan. This scenario would see the town increase taxes by $80,000 in 2025 (0.4 per cent) and pay the loan back over ten years.
- External loan. This scenario would see the town borrow $800,000 from Infrastructure Ontario to repay the loan to itself immediately. The borrowed amount would then be paid back over 10 years. This option would add just over $200,000 in interest costs to the total, which would require a tax levy increase of $100,000 in 2025 (0.48 per cent).
Staff recommended council defer a decision until the fate of the King Street property is determined. Earlier in the meeting, council voted to start an RFP process to look at future options/possibilities, including a potential sale, of the property.
Council endorsed the recommendation in a unanimous vote.
