Westlock County councillors have potentially opened a can of worms in regards to their assistance to local organizations looking to secure better interest rates when borrowing funds.
Earlier this year, the county agreed to borrow $5.6 million from the Alberta Capital Finance Authority (ACFA) on a 20-year term for the Westlock Foundation, which is currently expanding the Pembina Lodge.
The ACFA is, in essence, a bank controlled by the provincial government that loans money to municipalities, school boards and “other local entities” at lower interest rates.
By the county agreeing to borrow the funds, the foundation was able to secure a much lower interest rate, which means a savings for taxpayers, who ultimately fund the foundation.
It was win-win.
But now that the county has granted this type of loan to one group, where will it draw the line? Any business or organization looking to expand or improve its infrastructure would be foolish not to at least ask.
Last week the Westlock Seed Cleaning Co-op (see story on Page 3) approached council hoping to secure a $750,000 loan over a 15-year term with a similar agreement to that of the foundation.
Expansions are planned at the co-op, much like they were planned for the lodge, and they too are hoping to take advantage of a better rate.
The number of other businesses and community organizations to come out of the woodwork hoping to borrow at a decreased cost remains to be seen, but one could guess there will be some.
Without question the seed cleaning delegation made a convincing case at council’s Dec. 13 meeting citing a wide range of municipal support for other plants around the province — Sturgeon County provided a $150,000 interest-free loan to its plant.
In addition the local co-op boasts more than 1,000 shareholders, so there’s little question about the integrity of the organization, its importance to the farming community, or its ability to repay the loan.
But it is important to remember that when the county borrows from the ACFA, they are borrowing on behalf of all of its ratepayers.
So the question still begs … where does council draw the line? The foundation is a quasi-government body, while the co-op is, in essence, a business controlled by a board of directors.
