(File photo/battlefordsNOW Staff)

By Angela Brown

Up to $7.5 million

City passes borrowing bylaw for Sanitary Sewer Upgrade project

Dec 20, 2021 | 3:14 PM

The City of North Battleford passed a borrowing bylaw in a special meeting of council Monday for capital financing for up to $7.5 million. The funds will cover the city’s share for the large-scale Primary Sanitary Sewer Trunk Upgrade project currently underway.

The city received offers from both RBC and Scotiabank. City Finance director Brent Nadon said in assessing the proposals the results were close. The RBC proposal scored higher in the various criteria, which included the rate structure and term of the financing. As a result, administration recommended the city accept the RBC proposal instead.

Council unanimously approved administration’s recommendation to award the borrowing for the Sanitary Sewer Upgrade project to RBC in the amount of $7.5 million. The RBC proposal accepted is for a 25-year interest swap rates, with a 15-year banker’s acceptance, and quarterly payments for an all-in-rate of 2.94 per cent.

Nadon also said that in light of the current market conditions, administration recommended the city proceed with a single withdrawal for the full amount of $7.5 million of the loan in early January.

“Given the market volatility of swap interest rates and the need for legal processing of the loan, the 2.94 per cent indicative swap interest rate may fluctuate, thus requiring administration to have flexibility to contract at an all-in-one rate not to exceed 3.44 per cent,” he said.

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As part of the agreement, the debt will be payable in monthly installments of principal and interest in the years 2022 to 2046 inclusive.

The bylaw also indicated that the money used to pay the principal and interest owing under the borrowing arrangement will be taken from the city’s utility operating surplus.

To fund the Sanitary Sewer Upgrade capital project, the federal and provincial governments will each contribute $4,533,333 for a combined total of about $9 million, of the total $16.5 million project cost. The initiative was initially planned with the city, province and federal government each covering one third equally. Instead, the city had to make up the difference for the added PST cost on construction. Some changes to the delivery of the program also increased the costs.

As the city previously stated, the infrastructure project was needed to support North Battleford’s continued growth.

“Without this planned expansion to accommodate capacity, the current infrastructure would not be able to handle the growing North Battleford population,” the city said in a release. “Additionally, with our changing climate, extreme weather events are becoming more regular. Current infrastructure can become overwhelmed by extreme rain events causing sewer backups for property owners or potentially cause untreated sewer overflow into the North Saskatchewan River. This infrastructure will protect residents and our environment.”

Angela.Brown@pattisonmedia.com

On Twitter: @battlefordsnow