Military museum confirms $8 million projection
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The Elgin Military Museum (EMM) in St. Thomas is working to reassure the public about the projected financial cost of Project Ojibwa after it rose to an overall total of $8 million from an original $6 million.
This figure is of particular import in Bayham, given its connection to the project, due to the fact the municipality has agreed to act as guarantor for up to $6 million.
Melissa Raven, Director of Communications for Project Ojibwa, confirmed a $2-million increase in estimated costs Friday during a telephone interview, but pointed to a series of mitigating factors.
“In a sense, yes there is an $8 million cost associated with it at the moment, but there’s a little confusion as to what creates that $8 million dollars,” Raven said. “That figure also includes the start-up costs between 2009 and the things that are included - the move, elements that are included in the guarantee.
“So that amount, what was paid by cap, what was paid by various other sources from the Elgin Business Development Fund - those things were spent and paid for before the guarantee, so they were never included in that $6 million dollars.”
Raven listed updated expenses included in the new price tag, such as the move, an environmental study, preliminary engineering, and the writing of the business plan.
“All of those costs are included in the $8 million but were never included in the $6 million guarantee – because they had already been paid for.”
They were things that had already occurred and were paid either under cap funding or under another funding source, she added.
“They weren’t part of the discussions for the guarantee.”
The $2 million increase in costs does not change or impact Bayham’s original loan guarantee of $6 million said Raven.
It does however, represent a significant jump in projected costs.
“There’s a few reasons,” said Raven. “When we started this process, and there was the proposal from Bayham, dredging was going to be paid for by Bayham. That then switched and the responsibility for the cost of dredging came over to the museum.”
Taking on dredging, and the delayed nature of the dredging itself to a lower-water season compounded expenses, Raven continued.
“It was estimated at the time, $1 million – that was not in the $6 million that we talked to the DND (about). The $6 million came from DND, they said this is what you have to have if we’re going to give you the sub,” explained Raven. “ Dredging at that point was the responsibility of Bayham – that later changed for a variety of reasons and we had to add that to our costs.”
Delays on part of the Department of National Defence, delays in the paperwork for the loan guarantee, combined with other factors including Hurricane Sandy, contributed to pushing the project back two extra months, said Raven, changing landing day from September 8, 2012, into November.
“It was related to delays that were caused by the DND, some by weather and some the fact that it took longer than anyone anticipated to actually write up the guarantee agreement, so we couldn’t buy the steel to make the offload cradles,” said Raven. “So there were a number of contributing factors with being delayed to November, and that increased our costs at the same time.”
The increased cost of dredging related to this timeframe also played a role, says Raven.
“The level of the lake – the estimated cost of dredging was based on the level of the lake in the spring, well by the time November came around the (great) lakes were at their lowest level in decades so that meant we had to dredge more.”
In speaking to the press, Raven also hopes to clear up a perception the museum has not been making regular reports.
“We’ve been making monthly updates, both in terms of progress reports and financial reports since the municipality agreed to be the guarantor, so the reports have been going in. We have at times, as any business would, asked that they be kept confidential within council but we have been certainly providing those financial and progress reports to them.”
Raven noted that despite unexpected increases, the project is making progress and moving ahead.
“Our whole financing with the Royal Bank was based on the income the museum is going to make. And that’s all very much on track – we’ve got tremendous demand already and we haven’t actually rolled our full marketing program out yet.
“So we’re very, very optimistic.”