Estevan City Council has authorized an increase in the City's debt limit from $45 million to $55 million.
In a report to council, City treasurer Jeff Ward said the loan is needed to facilitate the cash flow needed for capital projects over the next 15 months, and to comply with the payment amounts for contracts already tendered and awarded for next year.
“This is intended to be a short-term increase with the intention to have the ability, at the end of 2014, to re-establish the debt limit at a lower level,” Ward said in his report.
The City will term out another $9 million to relieve the current overdraft as of January 1, 2014. The current debt load facilitates an approximate reduction of the debt principal in the amount of approximately $5 million per year.
If no further borrowing will be permitted in the next three years, the debt limit will be $35 million at the end of 2014, followed by $30 million and $25 million by the end of 2015 and 2016, respectively.
Deputy mayor Greg Hoffort said the increased debt limit is needed because the City relies on grants from the provincial government. But the City has to spend the money and then gets reimbursed. There are also some lingering projects that have to be completed.
“I can tell you, to a person on our Council, there is no greater initiative than getting our debt in hand, and reducing our debt,” said Hoffort.
Other highlights from the meeting:
*Angela McNab has been hired as Estevan's new building official. Hoffort said he is pleased with McNab's hiring, as the Land Development Services department has been short-staffed for some time.
*Ward has been officially appointed as the interim City manager and license inspector while council looks for a new City manager.
*The City will retain its membership with the Federation of Canadian Municipalities for $1,837.19.
*Nearly 25,000 pounds of recyclable materials were collected from the Pleasantdale subdivision in September. Regens Disposal expects that number to soar in October, since curbside recycling was enacted throughout the community during the month. A little less than 257,000 pounds of trash were collected from Estevan residents in September.
*A new contract has been signed between the City and Southeast Aviation for marketing and sales services for the Estevan Airport.
*Council approved the community lottery grant allocations for the fall intake period. There will be seven target grants worth $5,500 and 17 basic grants for $41,617.
*Three readings were given to a bylaw that will see 14 metres of undeveloped land on Sixth Avenue closed as part of a land acquisition agreement with CSA Investments.