Council starts process of borrowing$15.8 million

By MORGAN IAN ADAMS Collingwood Enterprise Bulletin October 22 2010
COLLINGWOOD– Town council- lors started the process of adding to the municipal debt, approving bylaws at a special council meeting, Thursday morning, to put out debentures for the library, downtown revitalization, and First Street reconstruction.
In total, the town will be borrowing more than$15.8 million:$7.286 million for the library/municipal building, $3.558 million for the downtown($1 million of which comes from Down- town Collingwood BIA), and$3.485 million for First Street. Another$1.5 million will go to the Raglan Street serv- icing project; however, the muncipality has a deal with the benefitting landowners to recoup that money within the next year,
CAO Kim Wingrove said if the town does nothing else next year, the pay- ments on those debentures will repre- sent a 3.95%budget increase; she noted the town had built$1.2 million into the 2010 budget for debenture payments related to these projects, and that amount can be pulled ahead to 2011 to offset what could have been a 5.99% increase.
She said that amount was one-time, and in 2012, “we will need to do some- thing to make up that 2%.
“There are a number of ways we could offset(the increase), and as we go through the budget process, we can explore that,” she told councillors.
The library/municipal building will be debentured over 20 years, with a 3.92%interest rate; the other two proj- ects will be paid back over the next 10 years, with an interest rate a little over 3%.
Councillor Mike Edwards noted the “timing stinks,” and asked what would happen if the town didn’t go ahead with the applications at this point in time. Wingrove said it was necessary to do it now lest the town hit a cash crunch by the end of the year.
She said the town has been paying for the projects out of general revenue– but with payments due at the end of the year to Simcoe County and the boards of education, “without long-term debt financing(for these projects), we would be in a difficult position.”
Wingrove said Thursday morning’s approvals are the first step in a two-step process; the municipality can now put those applications to the Ontario Infra- structure Financing Corporation. It will take a month to finalize those deals, she said, with the matter coming back to council by the end of November or beginning of December.