Council approves option to pursue borrowing

Council has approved a bylaw that will allow the Town to borrow up to $5 million in order to leverage federal infrastructure grant funding.

Town Council has approved a loan authorization bylaw that will allow the Town to borrow up to $5 million in order to leverage federal infrastructure grant funding to complete a number of identified projects, with the focus being water, sewer and road renewal around town.

The potential grant funding comes in the form of the New Building Canada Plan, a 10-year federal government initiative to further improve basic infrastructure across Canada. Typically, in order for a successful grant application to take place, the Town must prove it has a third of the required funds for the project in its five year financial plan.

Actual borrowing can only occur through specific council resolution and the support of the Province, local voters (through a referendum or alternative approval) and the regional district.

The Town will still have the opportunity to come up with the necessary funds without borrowing. Passing this bylaw simply gives the Town the option to pursue borrowing in the future should it be needed.

Most of council saw this as a valuable tool, but one that should be used with caution.

“I do think borrowing is a tool. In my opinion, borrowing is a tool of almost last resort,” said Coun. Ron Oszust. “I’m hearing that there is opportunity to have that tool in the tool box if it’s needed and there is still an opportunity of time to do a bunch more homework and exploration [prior to borrowing].”

Only Coun. Keith Hern opposed the bylaw. He felt that it was too soon to push the bylaw forward, and more analysis and investigation needed to be done first.

“I think the logical approach is to allow the staff time to do the analysis,” Coun. Hern said. “Putting the borrowing bylaw through today, I was going to say it was a bit like putting the cart before the horse, but I think in this instance it is a bit like pushing the cart down the road while the horses are still in the barn.”

Instead, Coun. Hern much preferred the idea of pushing forward grant applications that didn’t involve borrowing, believing that the Town’s contributions towards the grants can be found within its existing capital budget and reserve funds.

“If we link the grant application with a successful borrowing bylaw, then if the referendum for the borrowing bylaw fails, then the grant application will fail also. I think it would be far more successful if we had a grant application that didn’t rely on borrowing,” he said.

Some of Coun. Hern’s concerns proved to be invalid according to statements from Town CAO Jon Wilsgard.

“The federal government infrastructure funding authorities don’t care where the municipality gets its monetary funding from. It doesn’t matter whether you borrow the funds or whether you’ve got it internally…All you need to show is that you have it,” said Wilsgard.

When later reached for comment, Wilsgard also didn’t see the referendum as an obstacle for grant application purposes.

“A referendum will not ruin a grant application because you wouldn’t even make the application if you needed borrowed money until the referendum had passed and you knew the results,” Wilsgard said.

Nevertheless, Council understood Coun. Hern’s reservations towards the bylaw.

“I like the way he (Coun. Hern) has gone about structuring his argument,” said Coun. Caleb Moss.

“I don’t necessarily come to the same conclusion…I have been swayed and somewhat convinced…that trying to find ways to fund this without borrowing and within the water, sewer and roads budget is the best way to go forward. Having said that, I also know that considering borrowing is always going to be a part of the conversation.”