City steps up for multi-million dollar loans for future endeavours
By Timothy Schafer Local Journalism Initiative Reporter
The shopping list may be short but the register total is long as the City dips into the stream of municipal finance borrowing for two big ticket items.
City council approved the first three readings of the borrowing bylaws for the Civic Centre and the fire equipment — borrowing included in the City’s Five-Year Financial Plan to support strategic objectives.
The total amount of borrowing is $7,020,760, with the Civic Centre loan — for up to $4,200,000 — would allow for paying for upgrades to the Civic Centre in 2024. The other part of the borrowing includes a sum of $2,820,000 to support the purchase of fire ladder truck and tanker truck in 2026 and 2027.
“Given the amount of time required between passing a loan authorization bylaw and the receipt of funds, staff are recommending that the borrowing process be initiated now in order to ensure funds are available if and when needed,” noted City chief financial officer Chris Jury in his report to council.
The total funds borrowed for these projects will be paid back over 20 years, he explained, with the borrowing already included in the 2023-2027 Five Year Financial Plan.
Borrowing basics
Under Section 179 of the Community Charter, a municipality may, by a loan authorization bylaw adopted with the approval of the inspector, incur a liability by borrowing for any purpose of a capital nature.
Loan authorization bylaws require approval of the Province. After council passes first three readings of the bylaw, the bylaw is submitted to the Ministry of Municipal Affairs for review and approval by the Inspector of Municipalities.
When a municipality is successful in the process of passing the loan authorization bylaw a Certificate of Approval is granted from the ministry which allows the City to draw on the borrowing as required.
Certain types of borrowing require the City to seek electoral approval or go through an alternative approval process. This would be done following approval from the inspector.
Source: City of Nelson agenda June 6
