City staff recommends against offsetting Tennis Centre’s $630K shortfall
By: Clint Fleury, Local Journalism Initiative Reporter Source: TBnewswatch.com
THUNDER BAY – The Thunder Bay Community Tennis Centre is reporting a projected $630,000 shortfall in construction costs.
Although the tennis dome is expected to open by the end of December, the tennis organization will ask the finance and administration standing committee for additional funding, as well as an early release of the next milestone payment on Tuesday, to complete construction.
The $4.1 million project has increased to $4.95 million, according to the staff report.
In November 2024, the Tennis Centre and the city signed a funding agreement for $1.5 million. The agreement outlined that the facility would get 50 per cent upon signing the agreement and confirming a signed lease agreement, which the organization has received.
The other 50 per cent would be provided after significant construction was completed.
“Administration is not recommending an additional financial contribution to cover the construction overage for this project, Keri Greaves, commissioner of corporate services, told Newswatch in an email statement.
The report says it’s not recommending giving the Tennis Centre its next milestone payment because releasing the next payment before “substantial completion would reduce the city’s risk protection, particularly given the current budget shortfall,” and the additional funding request does not align with “prudent financial management.”
However, the staff report outlines that a loan backed by the stabilization reserve would be an option if the committee chooses to move forward with providing additional funding to complete the project.
“If the committee would like council to consider providing additional city funds for this project, it will need to determine whether that support should take the form of a grant contribution or potentially a loan,” Greaves said.
But Greaves says that option would come with its own risks to the city.
“Allocating funds from the city’s reserves and reserve funds for this purpose may not align with their approved uses, and any loan arrangement would carry an inherent risk of non-payment,” Greaves said.
To provide the Tennis Centre with a “promissory note” or loan, the money would need to come from reserves. However, all the city’s reserves have attached policies and criteria designated to them.
The city identified the stabilization reserve as a preferred option to back the loan, but the report states it would not be consistent with the reserve’s “stated intent under the policy.” The reverse is meant to safeguard the city against unplanned budget variances.
The current estimated uncommitted balance in the stabilization reserve is $10.1 million.
Another option for the committee’s consideration is the Renew Thunder Bay reserve, but this also “may not align with its intended purpose,” the report says.
The current uncommitted balance in the Renew Thunder Bay Reserve Fund is approximately $6.9 million, the report said.
The report also says a loan repayment to the city could “create additional pressure” on the Tennis Centre’s operating budget. The city could delay repayments by two years to allow the facility to open and stabilize, but could face “challenges in collecting the money if operational revenues and fundraising efforts do not meet the facility’s projections.”
Jamie Grieve, tennis director for the Thunder Bay Community Tennis Centre, said, “I think from our organization’s standpoint, I think it’s a little disappointing.”
“I mean, we’ve done a lot of work on this over the last six years or whatever it is now and obtained a lot of outside sourcing, whether it’s FedNOR, NOHFC, CEDC, Tennis Canada, the national sports body, as well as, $25,000 in sponsors and $15,000 in donors. So I mean. We think that we’ve worked extremely hard, and if there is a way for the city to help us, I think that we’ve sort of earned it.”
This story has been updated with a comment from Jamie Grieve, the tennis director for the Thunder Bay Community Tennis Centre.
