City council has officially agreed to financially support the Buffalo Pound Water Treatment Corporation’s need to borrow $55 million to pursue its plant renewal project.
During its Sept. 12 regular meeting, council gave three unanimous readings to the Buffalo Pound Water Treatment Corporation plant renewal project borrowing and guarantee bylaw. The unanimous approval means the bylaw goes into effect immediately.
The bylaw is a result of council's discussions in August to enable Buffalo Pound to acquire additional funding for its renewal project.
At that meeting, council authorized the finance director to negotiate, approve and enter into all necessary agreements with the corporation, the Royal Bank of Canada and City of Regina for the project.
Moreover, the finance director was authorized to execute any and all documents, certificates and other agreements that the City of Moose Jaw requires to facilitate Buffalo Pound’s borrowing of $55 million from RBC, including Moose Jaw providing a guarantee of $14.3 million and any related interest or cost of the debt resulting from the borrowing.
Furthermore, council instructed the city solicitor to prepare a borrowing/guarantee bylaw based on the terms and conditions that the finance director negotiated. It also authorized the city manager to exercise the city’s voting rights in Buffalo Pound to approve any resolutions or documents the corporation requires for the borrowing of $55 million and any related costs.
Council approved the recommendations on the condition that the swap interest rate plus credit spread percentage be equal to or less than 5.8 per cent when the corporation executes the swap interest rate agreement and confirmation, a council report said.
If the swap interest rate and credit spread percentage exceeds 5.8 per cent, then the finance director was ordered to bring another report to council to obtain extra approval before completing the contemplated borrowing.
“The final interest rate for the $55,000,000 in borrowing will be set once the appropriate guarantee/borrowing bylaws are in place and the loan agreement has been executed,” the report added.
The city’s outstanding debt load as of June 30 was $72,452,185.76; its debt limit is $95 million.
