Funding for the high service pumphouse replacement project is one step closer to reality after city council approved a motion during its recent meeting to officially authorize the borrowing of $8 million.
During its Dec. 13 regular meeting, council gave three unanimous readings to a borrowing bylaw that would enable city administration to acquire the funding through a bankers’ acceptance interest rate swap loan. The interest rate swap loan will be signed at the banker’s acceptance rate of two per cent plus 0.59 per cent for 15 years.
Council authorized the director of finance during the Nov. 8 executive meeting to negotiate, approve and enter into all necessary agreements with the Royal Bank of Canada (RBC) and execute all documents, certificates and other agreements necessary to facilitate the borrowing of $8 million from RBC.
City hall will use the borrowed money to partially fund the planned expenses for the project, while $2 million will come from federal Gas Tax funding and $4 million from provincial Municipal Economic Enhancement Program (MEEP) funding.
The City of Moose Jaw’s debt limit is $95 million, while current outstanding debts total just over $67 million. Adding the $8 million will increase the outstanding debt to $75,074,380. Meanwhile, an interest rate of 2.59 per cent over 15 years of the loan will add another $1.68 million in costs.
The next regular council meeting is Monday, Jan. 10.
