City preps to borrow $87M
Debentures relate to the next four years of construction plans for utility departments
A parade of borrowing bylaws spanned city council’s last meeting of 2018 and its first of 2019, and it won’t be until late February until the debentures, totalling more than $87 million, will be fully approved.
Those relate to 2019-2022 general construction programs of various utility departments, which put forward four-year business plans in early December.
Councillors remarked on the glut of financing measures at the Jan. 8 meeting this week, when 28 separate financing items were read into the record as part of first reading.
That followed 24 borrowing bills first read on Dec. 17, but need to be advertised for several more weeks before they can be passed.
“It’s an entire business cycle that we’re approving all at once,” said Coun. Phil Turnbull, chair of the utility committee and who therefore moved the bylaws.
“Our city has done a good job of replacing what’s needed, and our commissioner is always looking at the lifespan of our assets, deciding what can maybe wait.”
Maintenance, infrastructure replacement and upgrades and several special projects for gas and power distribution, sanitary sewer lines and potable water supply are included. Not yet ready are borrowing measures to fund the municipal construction plans, which include storm sewer replacements and road work, done alongside general sewer and water lines.
That combined effort to replace infrastructure approaching 100 years in some places led the city to adopt a 30-year strategy in 2013.
That makes up the largest single portion of the budget in most years.
Utility departments will spend about $10 million per year in replacing aging sewer and water lines, not including about $5.5 million in two separate years to tackle piping in downtown streets.
The largest item is $8.9 million to build a new power substation in the city’s far southwest quadrant, potentially to supply greenhouse development in the city’s service area of Cypress County.
About $9 million in total will be spent over several years to complete the Brier Park Sewage gravity bypass.
In the category of general asset management, multi-year items include $500,000 per year to add new utility service hookups, about $2 million per year to upgrade overhead and underground electrical lines, and $130,000 per year to improve the fibre-optic network in the city.
The borrowing will increase the share of the city’s debt related to the utility department, often described as “ratesupported” by administrators, because it is paid off through charges on utility bills.
The portion of “tax-supported” debt, relating to municipal capital projects, is expected to drop.
The 2019-2022 municipal budget plan, approved last month, states the city’s total debt load would rise by about $10 million to $357 million by the end of 2019, then add an average of $12 million per year to sit at $397 million by late 2022.
The apparent difference comes as the city is retiring debt over this period as well.
Utility debt, which sits at about $300 million today, would only reach about $360 million in four years, despite new borrowing of about $90 million.
Municipal debt, totalling about $45 million at the end of 2018, could be reduced by $10 million, unless the budget plan changes.
The items in the 2019 and 2020 utility budgets will come back to council for further readings and debate on Jan. 21. Considering they involve spending approved when the utility business plan was passed in December, the debentures are likely to pass without issue.
Another set will return to council in early February to be dealt with en masse — a procedure adopted with the 2017-18 budget period to cut down on political interference in spending priorities in later budget periods.