River Road project goes to alternative approval process

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Council passed the first three readings of a bylaw to authorize the city to borrow money for the River Road dike project, then decided to seek public approval for the loan through the alternative approval process.

When the municipality decides to borrow money, it has to have public approval which can be sought in one of two ways. Council can use either a referendum or the alternative approval process.

City staff applied for provincial and federal funding for the River Road dike project at the request of the former city council, and the request was granted after the current council members were elected. The total cost of the project is $11.5 million. Two and a half million will come from the land development reserve fund and $5,442,000 will come through grant funding. That leaves $3.6 million the city will need to pay to cover its portion of the cost of the project, money that will be borrowed, pending the outcome of the approval process.

Coun. Albert Koehler asked if the city could avoid borrowing the money if it sold off some of its land assets.

City manager Derek Bates said though the city has some land reserves, the balance is not in a particularly healthy place right now, and he isn’t aware of a circumstance where a land sale not already earmarked would serve the city considering the project has a deadline of March 2013.

“There’s an uncertainty raised by that funding gap that may not fit this borrowing circumstance,”  he said.

If, however, the city is in a position to pay the loan down sooner, it may do so according to Kathleen Soltis, director corporate services. She said the city usually takes out loans over 10-year periods and looks at terms when refinancing with the hope of finding the best deal for the municipality.

If it goes over a 20-year term, which was what was suggested at first, there will be a debt servicing cost of $279,594 per year beginning in 2014.

Skakun, who opposed the three readings of the bylaw, said he was concerned the loan would force another raise in taxes. However, once it passed he asked what the cost difference would be between a referendum and the alternative approval process.

Walter Babicz, manager legislative services, said a referendum, which is comparable to an election, would be about $55,000. The alternative approval process would cost about $1,600.

Skakun said he couldn’t support the referendum because of the cost, however expressed concern over the accessibility of the alternative process, a concern echoed by Coun. Garth Frizzell.

This time, they were told, the city will work to make the process more accessible, possibly making forms easily available on the website then returnable by mail, fax or perhaps even e-mail with a PDF document.

However, Coun. Frank Everitt expressed concern about the alternative approval process itself.

With this process a local government must publish a notice in a newspaper explaining the matter, in this case the loan request for the River Road dike project. After the second of two notices electors have 30 days to express the opinion, by signing an elector response form and returning it in time, that the matter is significant enough it requires a referendum. If 10 per cent or more of voters express this opinion, then the municipality can’t proceed without holding a referendum.

“It’s no secret I’m opposed to the alternative approval process,” Everitt said.

He said he believes there is a stigma attached to it making it hard to sell to citizens.

“I prefer people feel they had a say in the process.”

Coun. Dave Wilbur said he, too, is not usually in favour of the alternative approval process, but in comparing costs in this instance it makes sense. Coun. Lyn Hall added he is reluctantly in favour of it as well.

Public approval for the River Road dike loan will be sought using the alternative approval process, with everyone except Everitt in favour of the motion.

The dike will protect about 300 hectares of land that includes Industrial Rd., the CN tracks, Highway 16 and the east end of the downtown area, and was recommended following a report shared in 2009 investigating flood control solutions.