City council will not have to borrow as much money to fund the construction of the high service pumphouse after the federal government provided additional funding for the project.
The pumphouse will cost about $14 million to build. The provincial government has provided $4 million through the Municipal Economic Enhancement Program (MEEP). The other $10 million was to come from long-term borrowing, but the federal government recently provided $2.035 million in Gas Tax funding.
This means the municipality will now borrow $8 million, with repayment from the wastewater utility and rates charged to customers. Moose Jaw’s debt — excluding this loan — currently sits at $69,179,960.
Current outstanding debt includes the long-term multiplex loan ($13.3 million), the sanitary sewer long-term loan ($2.8 million), the long-term waterworks capital loan ($25.7 million), the loan guarantee for the Buffalo Pound Water Treatment Corporation (BPWTC; $10.6 million), the loan guarantee for the Moose Jaw Municipal Airport Authority ($1 million), and further borrowing of $15.6 million by BPWTC.
Adding the pumphouse loan will increase the municipality’s debt load to more than $78 million; the debt limit is $95 million.
City hall expects the project to be completed by the end of November 2022.
During the Aug. 23 regular council meeting, city council voted unanimously to have city administration issue a request for proposals (RFP) to financial institutions about borrowing the $8 million. Furthermore, council designated the initiative as the city’s 2021 Gas Tax project so the additional funding can be directed to the construction.
“Usually, we’re funding the whole portion (of projects). To say we got another $2 million is a good news story,” said Acting Mayor Dawn Luhning.
Bevan Harlton, director of engineering services, explained that the walls of the pumphouse have been built and a crane has been installed inside the building. The crane will allow contractors to install the pumps and other water infrastructure while also allowing for continued maintenance.
He added that the roof should be installed in September, which will allow work to continue in the winter. City hall expects to commission the building next summer.
City council previously approved the borrowing of $10 million in August 2020, but finance director Brian Acker said the project now needs the borrowed money to finish construction. Once the RFP results are known and city administration chooses the proponent, it will create a report and borrowing bylaw for council to approve.
The shortest time for Moose Jaw to receive the funding is three months, he stated. However, based on a project occurring at Buffalo Pound, it could take seven months to receive the loan.
The provincial government has confirmed that the high service pumphouse project is eligible for Gas Tax funding.
Coun. Crystal Froese understood that there was plenty of infrastructure work to complete in Moose Jaw but was concerned that council was creeping closer to the $95-million debt limit. She wondered if city administration saw the need to dip further into that account or even use it up completely.
This loan does bring the debt closer to the $95 million mark, said Acker. City council could ask the Saskatchewan Municipal Board to increase the limit, but he believed $95 million was a “good limit” and something the municipality should accept.
There will be times when council must borrow for projects, but overall, it should be judicious going forward, he continued. He was comfortable with the current debt limit and thought funding other discretionary projects with debt should be avoided.
The next regular council meeting is Monday, Sept. 13.
