The Town is taking steps to cover the costs of the regional waterline, which was supposed to come from Bonnyville’s portion of the ID 349 agreement.
On Tuesday, town council passed first reading on a bylaw that allows them to borrow $6 million to pay Bonnyville’s share of the cost for the regional waterline.
That increased from the original debenture which was $3 million.
The Town planned on using the ID 349 funds to fund their portion, but with the province holding onto the 2019 ID 349 money and no decision on how the new formula will work, council had to do risk management, said Mayor Gene Sobolewski on The Morning After.
He said without the ID 349 funds, they don’t have the money to pay the contractor when the bill arrives later this year, which could be over $7 million.
“The waterline project was merrily happening and the grants from the federal government and provincial government have gone through and we’re basically cash flowing like we normally would. But we’re coming up to crunch time, because around March or June, we’re going to need to pay our share of the funds. In other words, 10 per cent of the total project, which is probably as brought forward to us yesterday was about $7 or $7.5 million or something like that and change.
“With the absence of the ID funds, we don’t have it.”
The Morning After with Town of Bonnyville Mayor, Gene Sobolewski.
Posted by Lakeland Connect on Wednesday, February 12, 2020
That puts more significance on the Ministry of Municipal Affairs decision on the future of ID 349.
If Bonnyville’s portion is lessened, there could be big changes, which makes things uncomfortable for the Town, said Sobolewski.
“That in itself raises a lot of questions in terms of if you have to use it, how do you pay for it? And the debenture is intended to be taken over 20 years. That in itself represents a nasty tax increase to be able to pay or to service that debt.
“We’re now having to make the uncomfortable decisions. Hopefully, something will happen within the next, say, three weeks or four weeks or so and the Minister will make a decision and we’re hoping that the funding that pretty much was in agreement by the partners, that formula will be adopted by the Minister and then we can start our planning exercises again and be able to move forward.
“If it doesn’t happen. Well, then comes the next dialogue and discussion in terms of the capital budget and the operating budget and some of the tough decisions that the Town is then going to have to make in terms of how do we maintain what we do.”