Above: The Rec Centre is well underway, east of Morinville. – Donald Boutilier Photo
by Tristan Turner
Council has unanimously approved first reading of a new Temporary Borrowing Bylaw that will allow the Town to continue to finance the Rec Centre project. This law enables the Town to borrow up to $18,837,688 until long-term financing can be secured and finalized.
Shawna Jason, Morinville’s CFO, presented the information to council.
Jason clarified that the reason this motion is coming forward to council now instead of earlier in the project was to align the proposal with the province’s debenture application dates and because the Town already had enough grant funding in the bank to proceed with the first few steps of the project.
The borrowing will involve three different loans, including $6,000,000 on an already existing line of credit, $11,737,688 borrowed at 2.421 per cent interest over a 5-year debenture, and another $7,100,000 loan for the Field House at 3.022 per cent interest over a 15-year term.
Council was cautioned by Jason that the interest figures are the latest available estimates from the province, and the final figures could change after the loan applications are approved.
Provincially allowed debt limits are 1.5 times the annual revenue of the municipality.
As a result of this new borrowing, Morinville will be coming up close to their $22,516,623 self-imposed debt limit of 85% of their total $26,490,145 borrowing capacity. Morinville’s borrowing capacity is expected to increase by nearly a million dollars after the Town’s upcoming financial audit. The Town’s current debt is $2,302,340.
Jason said she expects the loans to be paid back swiftly after sponsorship, federal gas tax and MSI grants all come rolling in to support the project. If the loans are not paid in full from these sources, longer-term financing options will be arranged.
After no comments or discussion from council, first reading passed unanimously after being proposed by Councillor Sarah Hall.