$11M water loan
North Glengarry council will borrow up to $11 million to help pay contractors working on the Maxville Water Project.
The township’s Director of Finance/Treasurer, Kim Champigny, said that the loan is necessary because the federal government – which has committed to paying $15 million of the project’s $30 million price tag – is operating on a claim-based basis.
“This means to get the full $15 million, you must spend $30 million,” she told council at a special meeting on Friday afternoon. “The township must pay for costs upfront and submit for reimbursements on a quarterly basis.”
She added that the reimbursements take between six to eight weeks, leading to cash flow shortages that must be financed on a short-term basis.
For example, expenses paid in April, May and June have not been reimbursed. It is predicted that the peak require- ment will occur in July of 2019 with a need of close to $11 million.
“Right now, we are waiting for $3.5 million,” she said. “We submitted a claim on Oct. 5 and we still don’t have money in our account.”
She says the government has told her the funds likely won’t come in until January.
For his part, Mayor Jamie MacDonald has contacted Glengarry-Prescott-Russell MP Francis Drouin to see if he could expedite the process. However, the mayor says that the funds still may not come in until the new year.
This short-term financing will result in interest payments of about $180,000, which will be considered in water system’s 2019 operating budget.
At the end of the project, based on the results of discussions with the province for additional funding, the municipality will be forced to borrow either $3.5 million or $7.5 million.
BOWL RAISED: The installation of a new water tower in Maxville was capped off with the raising of the bowl to the top of the reservoir last week.