(file photo/battlefordsNOW staff)

By Angela Brown

Infrastructure planning

City to look at borrowing options for Primary Sanitary Sewer Trunk Upgrade mega project

Jul 28, 2021 | 1:53 PM

The City of North Battleford will look at some borrowing options at an upcoming council meeting, to cover its part of the costs for the Primary Sanitary Sewer Trunk Upgrade mega project that is currently underway.

The extensive initiative is needed to accommodate the city’s growth and upgrade the current system which faces challenges.

City administration staff plan to come back to council with a report for the city to issue a Request for Proposals for borrowing, for consideration. They will present council with some options available, whether to borrow the city’s costs all through a financial institution or borrow partly from a financial institution and the rest internally from the city’s own reserves.

“Right now, they are just going out to get proposals from financial institutions to look at the options,” Mayor David Gillan told battlefordsNOW.

He noted there are some advantages with borrowing part of the funds internally, through the city’s reserves.

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“If we can borrow from our own reserves, then we are not paying third parties’ interest,” Gillan said. “So that’s a good thing, keeping our interest cost internal. But we have to consider maintaining liquidity in the city as well.”

He said it essentially comes down to how much the city can return its earnings versus the cost of borrowing.

“We look at it that way as well. So, there are a number of things we will be considering,” he said.

Gillan added the city will follow due diligence in the process before deciding which direction it will go, to “make the best decision that we can.”

The over $16 million project is partly funded by the province and federal government through the New Building Canada Fund program.

The city is responsible for its one-third share or about $4.5 million from the original estimate of $13.65 million budgeted, as well as overages from added costs, which works out to about $3 million more. In total, the city’s costs for the project run up to about $7.5 million.

The added costs from what the city originally budgeted for the project include increases in construction costs, specification adjustments, PST on construction costs no longer being exempt following the province’s changes, and added costs for decommissioning work.

Angela.Brown@pattisonmedia.com

On Twitter: @battlefordsnow