Bayham responsible for $6-million Ojibwa loan

Friday, March 13th, 2015

Bayham taxpayers could be on the hook for the entire $6-million loan given to the Elgin Military Museum to pay for the HMCS Ojibwa submarine project.

Bayham officials issued a media release announcing the development in the late evening of Thursday, March 12 after councillors met behind closed doors to discuss the situation.

The Elgin Military Museum has defaulted on its repayment obligations to the Royal Bank and has until March 20 to pay what it owes.

Should the Museum not be able to make the payment, the letter of credit Bayham is responsible for will be called upon by the bank.

A public information session will be held for local residents to learn more about what the loan default means for them on Monday, March 16 starting at 7 p.m. at the Vienna Community Centre. A detailed “Public Information Sheet” was posted on the municipality’s website and can be seen by clicking here.

If the Elgin Military Museum cannot pay what it owes to the Royal Bank by March 20, Bayham will be fully responsible for the Ojibwa debt of $6-million.

Bayham councillors have already approved a plan where the municipality will debt finance the $6-million from the Toronto-Dominion Bank for a 10-year term loan over a 25-year amortization period at an interest rate of 2.71-percent.

That will require loan payments of $27,555.95 per month.

According to the approved plan, the $275,559.50 in payments required for the rest of 2015 will be paid for from reserves and will not affect the tax levy.

In 2016, if Bayham has not recovered any money from the Elgin Military Museum or obtained funding from senior levels of government, $330,671.40 will be required to come from local taxpayers representing a 10.3-percent levy increase.

Read more in the Wednesday, March 18, 2015 print edition or the online e-edition.

Reader Comments (7 )
  • Bruce Mungar on Friday, March 13th, 2015 at 1:45 pm

    Now you know why Port Stanley let them have it.

  • Pat Collins on Friday, March 13th, 2015 at 10:11 pm

    I was opposed from the start.I was told by the deputy mayor that the sub would cost us nothing , this was part of his elction promises.
    does he still believe this?

  • Jeff Heitman on Friday, March 13th, 2015 at 10:49 pm

    It looks pretty cool and would like to tour it but once I found out how much it cost I though No Way! I think they were charging way too much for admission.
    Can Bayham sell the sub to help repay the loan?

  • Jake Wiebe on Monday, March 16th, 2015 at 6:44 am

    I saw this coming, from the very beginning. It’s really sad that Bayham let this happen to the citizens of the community.

    If they wanted to increase tourism to Port Burwell, a number of things could have been done to attract people: first and foremost, focus on the beach. The new concrete pier looks great. That’s a start. Businesses need to move in to draw people. The area is near dead! Get is moving with business, job growth, etc. Most everyone leaves Bayham when they go shopping. Why? What can be done to get people to stay and shop within their communities? What can be done to improve recreation facilities? LOTS can be done. But it will take a lot more creative thinking than a single submarine sitting in the harbour. Museums are often places you attend once- maybe twice. You’ve gotta get traffic and keep people coming back.

  • dave march on Saturday, March 21st, 2015 at 2:07 pm

    a big piece of that 6 million was spent on a ramp to pull the sub out. why not utilize this ? a public boat launch would attract a lot of people and right in the heart of the business district. a fee for launching and other services could be charged.good boat launches are rare around here and public ramps non existent . the two private ramps already here are at times so jammed up as to require a long wait and a hefty fee. there are no boat slips available for rent after early summer. the operation of a public boat launch could be tendered out and the resulting revenue returned to the community. a simple and rather obvious plan.

  • paul march on Saturday, March 21st, 2015 at 6:43 pm

    Where did the $6 million go? Dredging cost over-runs? Poor engineering? The contractors made out okay; nobody is suing anybody. The sub is there, okay fine. That was fun to watch and I had a ring-side seat. But I saw the original site plan. But that was it. Where is the park that was supposed to run along the Big Otter? Where is the Visitor’s Centre? Where was the advertising to promote the site? Where were the people who were supposed to make this happen. Who is responsible. Oh yeah, right, the taxpayers.

  • Mark Gibbons on Sunday, March 22nd, 2015 at 5:50 pm

    This is a shame….. I believe the people that where on council at the time this decision was being thought of and made…. ran away with part of the money from this endeavor, Why else would they approve this kinda of public spending. This is one of the worst examples of carelessness!! This sub has got to be sold to the highest bidder… hopefully it can even come close to breaking even… or at the least reduce the costs that is going to effect the entire municipality of Bayham

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