City considers using reserves to buy former STC building

It appears to be a certainty that Regina police will officially acquire the former Saskatchewan Transportation Company (STC) bus depot building to be used as a new headquarters and the city seems content with dipping into reserves to pay for it.

The city’s executive committee — which is made up of the mayor and councillors organized in committee form — met Wednesday and approved a motion to purchase the old STC building along with two parking lots.

The building and lots would cost $16.25 million and an additional $21 million would be spent on repurposing both that building along with current police headquarters right across the road on Osler Street.

In order to pay for it, the city administration has proposed to take $18.4 million from the general fund reserve while the remaining $18.6 million would come from the asset revitalization reserve.

“This is why we have reserves, is to seize opportunities,” explained Mayor Michael Fougere.

He added the asset revitalization reserve is designed specifically for the purpose of buying or renovating buildings or to expand.

Fougere distinguished how dipping into reserves for this endeavour is different than using that money to cover a funding shortfall left after the Wall government’s recent budget decision to change how municipalities received grants-in-lieu.

“This is a project. This is an infrastructure project. This is quite different than covering off unexpected expenses by way of downloading. That is not sustainable,” said Fougere.

A report from administration shows if $37 million is indeed taken from reserves, the general fund reserve would be around $3 million over the next five years. That is considerably lower than the $22 million minimum.

In the meantime, the asset revitalization reserve would be completely drained, expected to approach a balance of zero.

“This is going to make a serious dent on the reserves that we currently hold,” expressed councillor Andrew Stevens.

Despite that concern, Stevens and the rest of the committee still unanimously approved the motion.

The official decision on the sale is scheduled to be made Nov. 27 when city council formally meets.