Here is a summary review of the financial implications of the fire hall project: The CVRD is facilitating the project with input from the Hornby Island community to develop and construct a fire hall design that accommodates the needs of the firefighters and is endorsed by community residents. The process has been ongoing for almost two years with several community meetings and several months of design with the firefighters design committee, with size and features being trimmed to accommodate the community's sensitivity to tax increases.
In 2014, the Fire Hall Renewal Select Committee (comprised mostly of members of the Hornby Island community) set a maximum budget of $1.9 million for the construction cost of the building including site conditions. SUA Architects will work with the Hornby Island Fire Rescue (HIFR) Design Committee and the CVRD to ensure that the project is delivered on budget.
The current estimated construction cost for the new fire hall is $1.9 million. A $200,000 grant will come from the Community Works Fund, $100,000 from reserves, which leaves $1.6 million. Pending electoral assent by referendum, the CVRD board has approval to borrow $1.6 million from Municipal Finance Authroity to assist with the construction of the new fire hall on Hornby Island.
Borrowed funds will be paid back through tax requisition. Based on the $1.6 million loan estimate, the net increase to the tax levy over 2014, for the average Hornby Island residential property would be approximately $24 per year. Note the estimated increase in the tax levy is over 2014 figures.
Since 2012, the tax levy for fire services has increased and is being held in capital reserves in order to pay for the current pre-construction costs (design fees, community meetings and advertising, engineering reports, preconstruction coordinator), a second tanker truck for Superior Tanker Shuttle Accreditation (budgeted among of $180,000), emergency reserves for operations, and a budgeted amount for the decommission of the current fire hall should the referendum pass.
According to 2015 CVRD financial budget reports, the estimated debt repayment costs (interest and principal) for the $1.6 million loan (4% rate over term of 20 years) is $122,000 per year. Further to these reports, the portion of the fire services tax levy for an average property assessed at $455,000 that will go towards paying back these debt repayment costs is estimated to be approximately $120 per year.
Due to the second tanker truck being included in the reserves, it is important to look at the financial benefits of this second tanker truck or what is known as Superior Tanker Shuttle Accreditation (STSA). The HIFR will look to achieve STSA and then most homeowners on Hornby Island will get what is known as "Hydrant Protected Status" which means direct savings in their fire insurance premiums. We have received written quotes from two reputable insurance companies with significant savings - $300-$500 in savings annually (See hifd.org for copies of these letters). Other communities such as Gabriola Island, Errington, Salt Spring Island, and Central Saanich have achieved STSA and are realizing these savings already. At these figures, the savings may offset the annual tax levy increase. With the added tanker truck, even residents or homeowners without house insurance will receive a better chance of saving their home and contents in the event of a fire.