While some of the specific design elements are still in question, Lac La Biche County council has voted unanimously to borrow $16.46 million over a five-year term to pay for the planned Lac La Biche Main Street revitalization. The decision to go with a five-year payback term was made keep the Main Street plan on schedule and to avoid delays caused by public hearings, possible petitions or appeals of the borrowing bylaw that are triggered with debentures of 10 years or more.
The Main Street plan is slated to begin as early as May or June and is the second of a three-phase upgrade to services and design of the Lac La Biche downtown. Phase 1 of the project was completed several weeks ago and included the replacement of underground utility infrastructure, new paving, curbs and gutter from 105 Street to 103 Street along the main downtown corridor. Phase 2 of the project will run from 103 Street to 102 Street. Phase 3, scheduled to begin in 2023, will complete the project with new utility and streetscape upgrades from 102 Street to 100 Street. The overall plan will include approximately $10 million in utility and underground service upgrades to 70-year-old infrastructure, about $4.5 million in surface-level, streetscape architecture and additional costs for contingencies.
I guess we've got Main Street
- Lac La Biche County Mayor Paul Reutov following the $16.49 million borrowing decision
Making the decision on Tuesday afternoon, while still discussing some of the streetscape design items, council was required to get the funding application underway in order to have the money secured by the time work begins on Phase 2 next year.
"The big deal here is that the debenture funding must be in place before the project starts," said Dan Small, the county's association CAO, explaining that the debenture is another name for a mortgage and is borrowed by the province's financial lending authority at an interest rate given only to municipalities.
Interesting discussion
As of December 15, a week before council officially approved the borrowing plan, the interest rate for the debenture was at 2.48 per cent.
If the decision was pushed back, Small said the interest rate would likely be different — but how different was anyone's guess.
"On March 15, it could either be the same, or higher or lower. We just don't know," he said.
The current interest rate is higher than it was when the previous council approved the initial design plans to take advantage of low rates earlier in the year.
At that time — pointed out coucillor Charlyn Moore, while responding to fellow councillor Darlene Beniuk questioning why it was so imperative to start the project in 2022 — the interest rate for municipalities was just 0.89 per cent.
"The rate was under one percent. Now we are at 2.4 ... that's a huge financial implication," said Moore during recent discussions over the downtown plan.
One percent annual interest on a $16 million loan works out to $160,000 per year. At the current 2.48 per cent, the interest is nearer to $400,000 per year, or $2 million over the course of the repayment term. While the interest rates may have grown since earlier in the year, Small pointed out that they are still less than the 4.1 per cent rates paid a decade ago when the $65 million Bold Center was built.
In making the decision to borrow the funding, the community is on track to receive approval by the March 15 disbursement date. The next date that the province issues the quarterly funding approvals would be June 15.
"Doing it right now, we are on track... for March," said Small, allowing for construction to begin within the planned May or June window.
While discussions and debate on the proposed Main Street plan have been ongoing since 2018 — and continue to be discussed — the the motion to borrow the funding was approved in three unanimous steps within five minutes.
"I guess we've got Main Street," said Lac La Biche County Mayor Paul Reutov after the borrowing plan was approved.
While the funding and underground work has the green light for an early 2022 start, final design plans for the surface level streetscape elements are expected to come back to municipal officials in the coming weeks for their final approval.
