Enthusiasm for a P3 as a way to fund construction of the third stage of Ray Gibbon Drive appears to be waning while the idea of borrowing the required $15 million gains steam.
Three weeks ago Coun. Roger Lemieux expressed interest in exploring a public-private partnership to extend the west bypass but now he’s leaning toward borrowing for the project.
Lemieux recently hosted a private information workshop aimed at informing himself and other interested councillors on the ins and outs of P3s. He learned of a federal program called Canada P3 that provides funding for projects valued at $50 million or more.
That’s well beyond the scope of the road project and the timing also isn’t a good fit, he said, since the city will likely get money back from the province within five years and P3s typically can’t be paid off until they reach the 10 year mark.
“Ray Gibbon may not be a good fit for P3s,” Lemieux said.
He moved Monday that city administration compile a financial analysis and recommendation for either a P3 or a borrowing bylaw. The construction would cost $17 million for which the city has about $2 million in reserves, leaving $15 million to be funded somehow.
Lemieux said he’s leaning toward borrowing the money and so did Mayor Nolan Crouse.
“My gut feel says we should borrow $15 million and finish off stage three while construction costs are predictable,” Crouse said.
Lemieux and Crouse both felt the road should be finished as soon as possible to alleviate traffic volumes on Hogan Road and also open up the city’s northwest corner to development.
“We need that highway finished. It’s like something that’s half done,” Lemieux 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.
The province has provided two instalments for work completed to date, showing that it will make good on its promise and reinforcing that now is the time to finish the project, said Coun. Wes Brodhead.
“Construction costs right now are reasonable,” he said. “You’d hate to be in a position where you’re building and you’re paying premium prices.”
The city has done all the planning for the next leg and could have a tender package ready in a little over a month, said city manager Bill Holtby.
The June 30 deadline attached to Lemieux’s motion for financial analysis only allows time for a fairly shallow review of financing options, said city administrators.
Getting ready for fall construction is also “a stretch,” said Guy Boston, general manager of planning and engineering.
