City council took the first step toward borrowing $15.9 million to complete stage three of Ray Gibbon Drive.
Council voted 7-0 in favour of bringing forward a bylaw for first reading at the July 11 meeting. It would return for second and third readings in August.
Coun. Roger Lemieux has been talking for weeks about the construction climate being right for the next stage because of low interest rates, so he moved to pursue the bylaw.
“There’s no better time to secure a low interest loan,” he said. “I don’t think we’ll ever see it go this low again.”
The city has completed two stages of Ray Gibbon Drive, which connects Anthony Henday Drive with Giroux Road. The next stage will extend to Villeneuve Road. It’s an important stretch that will lessen the heavy traffic on Hogan Road, Lemieux said.
“Ray Gibbon Drive has to be completed some day,” he said.
The road is eventually earmarked to become provincial Highway 2. The province has pledged to reimburse the city for any costs associated with building the road to highway standards rather than commuter road standards.
Earlier this year the city spent $17 million on the land required for the third stage. It expects the province to reimburse it for that total.
Given current pricing has the next leg pegged at about $17.2 million, the city can recoup most of its building costs by moving forward now before construction costs go up, said Mayor Nolan Crouse.
“Today we can balance the books,” Crouse said. “It is so much the time to do it. It couldn’t be better.”
The city has $1.3 million in reserves for the project and is looking to borrow $15.9 million.
To pass a borrowing bylaw, the city must advertise prior to second reading and open up a 15-day period during which an official petition of opposition could be filed.
To be considered valid, such a petition would have to contain signatures from at least 10 per cent of the city’s population, said chief legislative officer Chris Belke. A successful petition would force the issue to be decided by a vote of the electors.
With or without a petition drive, residents and other concerned parties will be able to address council in the usual fashion during public meetings, Belke said.
City administration is considering borrowing the money from a chartered bank rather than the Alberta Finance Capital Authority, the most common source of funding for municipalities.
This is an unconventional way for a municipality to borrow, said chief financial officer Dean Screpnek. It would involve a slightly higher interest rate but would allow for early payback with little or no penalty and subsequently offers lower overall interest charges, he said.
The city is currently at 34 per cent of its debt limit. Taking on a loan of this magnitude would increase that to about 44 per cent, Screpnek said.
