City of Powell River council has approved more long-term borrowing to pay for the consolidated wastewater treatment plant.
At an April 7 meeting, chief financial officer Adam Langenmaier outlined a proposal to borrow another $5 million for construction. His recommendation was that council approves the borrowing of the money from Municipal Finance Authority (MFA) of BC, and that qathet Regional District be requested to consent to the city borrowing these funds over a 30-year term, and that the regional district include the borrowing in its security issuing bylaw. The money would be sought as part of MFA’s fall 2022 borrowing session.
Councillor George Doubt said the recommendation would provide for borrowing of $5 million on the city’s previously authorized borrowing of $27 million for the plant.
“In order to do that, we need to have the authorization of qathet Regional District because they are the ones that have the direct relationship with the municipal finance authority, so they put it in their long-term borrowing issuing bylaw,” said Doubt. “It’s just part of the already authorized $27 million. We are simply asking for that $5 million now to pay for the ongoing construction.”
Mayor Dave Formosa asked Langenmaier to let the public know how much the city had drawn from the $27 million that has been authorized.
Langenmaier said the $5 million council was voting on would bring the total amount borrowed up to $20 million.
“We took out $10 million in 2020, and additional $5 million in 2021 and now this $5 million in 2022,” said Langenmaier.
Formosa said there is $7 million of borrowing left.
“We borrowed early and we bought early,” said Formosa. “Thank goodness we bought parts, big parts, in the millions, early. It was the forethought of our staff, who came up with the idea that we would purchase early. We bought direct, so it wasn’t from the contractors, so we didn’t have the additional markup of the contractors.
“We got really good interest rates and we took advantage of it. We are very happy, because the majority of our parts were here. With COVID-19, we are still getting stung, but we would have been stung a lot worse, so we are able to build, where others are not able to build, because of the COVID-19 issues and the bids coming in too high.”
Council carried the borrowing recommendation unanimously.
In a report to council, Langenmaier stated the total expected impact of borrowing to the average single-family dwelling in the city is estimated to be $201 annually.
While the city has been approved for $27.28 million from MFA, the city is in the process of attempting to increase the loan authorization bylaw to $30,701,000. The increase has not yet been authorized.
This was Langenmaier’s last appearance before city council. He has accepted a position as chief financial officer in City of Courtenay.
