City of Powell River Council will consider borrowing $10 million to get the liquid waste treatment plant underway.
At the finance committee meeting on November 28, chief financial officer Adam Langenmaier said his report before the committee was the mechanics of making the request, through qathet Regional District, to make the request to the municipal finance authority (MFA) for borrowing $10 million over 30 years in the spring 2020 issue from the MFA.
Langenmaier said timelines must be met to ensure council has the opportunity to pass a resolution appropriately and that the resolution goes on to the regional district, before its board. He said information from the regional district supporting the city’s request to the MFA goes to the MFA, to be included in its annual general meeting regarding borrowing. Langenmaier said the MFA has time frames to get the information to look at how much money it is going to need to raise in the spring issue.
“All that takes time,” said Langenmaier. “All municipalities and regional districts follow the same timeline. It really depends on what’s going on in the province for big projects. They could have humongous cash requirements or they could have small cash requirements.”
Langenmaier said $10 million is the recommendation in his report and the request is also to go to the regional district to get the ball rolling for the spring 2020 MFA issue.
Councillor George Doubt, chair of the finance committee and a city director on the qathet Regional District board, said he expected the issue to come before the regional board at its December meeting.
In a report to the finance committee, Langenmaier stated that the city is currently working toward breaking ground on the liquid waste treatment plant project. To ensure smooth construction, the city should have adequate cash on hand to pay construction expenses as they are incurred, he added.
According to the report, grant claims can be made as construction and expenditures are incurred, however, the city must pay construction costs upfront and then submit claims for reimbursement through provincial and federal governments.
“To prevent project delays, the city should ensure there is adequate cash on hand for construction costs while grant claims are being processed,” stated Langenmaier. “The city is authorized to borrow up to $27,280,000 from MFA for the construction of the liquid waste treatment plant.
“The city can access funding as required by entering into long-term borrowing contracts with MFA. These contracts are subject to fixed interest rates provided by MFA and subject to what the interest rate environment is doing at the time of issue.”
The finance committee will be sending the following motion to the Thursday, December 5, city council meeting: that council approves long-term borrowing from the municipal finance authority of BC as part of its 2020 spring borrowing session, in the amount of $10 million as authorized by the City of Powell River Liquid Waste Treatment Plant Loan Authorization Bylaw 2551, 2019, for borrowing funds to construct the liquid waste treatment plant; and that qathet Regional District be requested to consent to the city borrowing these funds from municipal finance authority of BC, over a 30-year term, and that the regional district include the borrowing in its security issuing bylaw.