by Tristan Turner
Council has unanimously approved 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 $6,000,000 until long-term financing can be secured and finalized. The total borrowing on the project is currently expected to hit $18,837,688.
This comes after council unanimously passed second and third reading of the bylaw at the Mar. 27 meeting after only brief discussion and debate.
Shawna Jason, Morinville’s CFO, presented the Bylaw to council, but her presentation was brief in light of a more in-depth presentation she delivered during first reading on Mar. 13.
During first reading, 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 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.
During discussions on third reading, Deputy Mayor Dafoe mentioned that some residents have brought concerns to him about the pay back of the debt relying too much on provincial and federal funding, saying that the residents he heard from noted that both governments could change the level of funding Morinville receives from these sources.
This motion is largely a formality as council has already approved the construction of the arena in their capital budget. The new rec facility is already well into construction just outside of town along East Boundary Road and is expected be built in three stages, with this stage including two sheets of ice, a fieldhouse, and some common areas with leasing space and some other amenities. Later phases are expected to contain additional recreation sites and an aquatic centre, but the second and third phases of the project have not yet been approved by council, and no funding has been approved for them, with no solid timeline on their expected completion.
After only a few brief comments from council, second and third reading passed unanimously after being proposed by Dafoe and Councillor Richardson, respectively.