By Nikki Jamieson
Sunny South News
Coaldale town council is considering a borrowing bylaw to allow them to finance the design and construction of a new recreation complex.
During their regular April 8 council meeting, Coaldale town council reviewed the proposed Borrowing Bylaw 752-B-03-19.
The bylaw would allow the town to create the legislative framework necessary for the town to obtain funding for the design and construction of a recreation facility on town-owned property. The funding would be obtained through a $10 million debenture, without exceeding an interest rate of four per cent, to be paid back within 25 years.
“We’re bringing this towards you now because we can’t start any of the design until the borrowing bylaw has been approved,” said Kyle Beauchamp, director of corporate services for the town.
“Also, it is a good time for interest rates. When we did the budget back in November, the rates have decreased by about a third of a point already, and right now, we’re sitting at about 3.1 per cent. So it’s a good rate, so we’re looking to get this set up now to save some extra cash.”
The debenture and corresponding debt servicing payments, would be funded through an annual recreation special tax of $120/year per household. Once financing has been approved, the town can hire architectural design consultants to help with the community and stakeholder engagement process to determine what amenities the facility will include.
According to section 258 of the Municipal Government Act, a municipality may borrow to finance a capital project, with the borrowing term exceeding five years if ” (a) a borrowing bylaw that authorizes the borrowing has been passed, (b) the money to be borrowed is insufficient because the cost of the capital property has increased, and (c) the increased cost does not exceed 15 per cent of the original cost of the capital property”.
Coun. Bill Chapman asked about item four listed in the bylaw, which states “The Municipality shall levy, and raise in each year, municipal taxes sufficient to pay the indebtedness”, and asked if it was an all-encompassing statement, or if it just related to the $120/year recreation levy. Beauchamp said it was more of a “general statement” for the bylaw.
“The intention is to use the rec levy to pay for this,” said Beauchamp. “This is just the boring parts of it, and it’ll just say it will be repaid through the municipality collection levy, tax, etc.”
Mayor Kim Craig noted it was just “poor wording”.
Council unaminously passed first reading of Borrowing Bylaw 752-B-03-19. Coun. Henry ‘Butch’ Pauls was absent from the meeting.