St. Albert city council has approved the final readings of a bylaw authorizing the city to take out a $25-million loan to service lands on the west end of the city, opening up opportunities for development where the city has room to grow.
On Monday, council unanimously passed second and third readings of a borrowing bylaw to finance the design and construction of water, sanitary stormwater and road infrastructure to service the Range Road 260 and Lakeview Business District lands.
Back in March, city council directed administration to prioritize designs to service the lands and to bring back a borrowing bylaw if needed. The bylaw's first reading passed at council Nov. 2.
A portion of the funds will be used for the servicing of the trunk line to the future recreation site in the north, but a lot of the money is being spent to bring services across Ray Gibbon Drive to the west side, explained Adryan Slaght, city planning and development director.
"There's a lot of benefit to the rest of the city with this project," he said.
Servicing these lands would get the city's newest business district and the future rec site to the next step of development. The city is currently in negotiations with Rohit Land Development for the land donation, which the city has committed to service as part of that agreement.
The estimated cost of this infrastructure project is $25.1 million, which includes a 25-per-cent contingency fund, or funds to use in case of any unforeseen emergencies, said Brenda Barclay, manager of financial operations and reporting.
While the city is authorized to borrow $25 million, Barclay confirmed to Coun. Sheena Hughes that if the city doesn’t go over budget, the project should come in around $20 million. The province has given the city a grant for $5 million for this project under its municipal stimulus program, though that money hasn't been received yet. That would leave the city to pay back $15 million in debt over time.
Approximately $12.4 million will come from the city’s off-site levy recovery fund reserve, or funds collected from developers at the start of a new development, to pay back the loan. Those funds aren’t currently in the pot, but Barclay said the city is anticipating to collect that amount over time.
Another $1.9 million in savings was realized through some servicing agreements, with any additional shortfall funded through the off-site levy reimbursement fund.
Under the bylaw, the city will pay the combined principal and interest instalments over a period of up to 20 years, with an interest rate of up to 10 per cent, though David Leflar, director of legal and legislative services, said it's unlikely the city would pay rates that high.
With borrowing paid back mainly through off-site levy funds, Barclay confirmed to Mayor Cathy Heron there will be no tax impacts to St. Albertans.
After the vote, councillors Wes Brodhead, Ken MacKay, Sheena Hughes and Jacquie Hansen voiced their support on opening up these lands to development without impacting residential taxes. Heron thanked Brodhead for suggesting the city go after provincial funds to get servicing under Ray Gibbon Drive done faster.
