Westlock town council has given first reading to a bylaw that will enable the municipality to borrow the additional $3 million needed to complete the Westlock Rotary Spirit Centre.
This has not, however, dissuaded the members of the Spirit of Westlock Foundation from their plan to exceed their fundraising goal, considering the support they’ve had so far.
“I think we’ve got a little over a million dollars committed,” said Wayne Peyre, chair of the foundation.
“Our goal is $1.5 or $1.6 (million), and I still think it’s very achievable.”
The town must borrow the additional funds because the project’s original contractor, Balon Construction, went into receivership. The Brenex Building Corporation has since been hired to complete the facility.
Switching construction managers partway through, as well as having to renegotiate some key contracts, has caused the price to balloon by about 20 per cent to $15 million.
The bylaw will now be advertised for two weeks and a public hearing is scheduled for the June 13 council meeting when residents will have an opportunity to voice their opinions about the edict.
Council approved first reading of the bylaw unanimously, but it wasn’t without some regret.
“I’m sure disappointed after all the work the Foundation and the administration did to get this project going that we have to borrow another $3 million,” Coun. Darrel Erickson said.
As far as the foundation is concerned, Peyre said, the members are taking the new developments in stride.
“Nobody’s dancing with joy over it; we’re not happy that we’ve had to go through this, but we still think the project’s viable and important, and we’re going to make it happen,” he said.
The foundation’s fundraising efforts will continue until they have reached or exceeded their goal, and although they may slow down a bit for the summer holiday season they will ramp up again in the fall.
“We’re trying to figure out our timing on that,” Peyre said.
Lorraine Nyal, the town’s finance director, said the time is right to borrow money, because interest rates are currently low relative to how they have been in the past — most of the town’s current debt is at borrowing rates of about 10 per cent.
“I feel it’s a good piece of business to do right now to complete the Spirit Centre,” she said.
The rate currently being offered by the Alberta Capital Finance Authority (ACFA), as of May 1, is 4.121 per cent. The bylaw calls for the $3 million to be paid back over 20 years, which at a fixed rate with monthly payments means a total interest payment of close to $1.4 million for a total cost of $4.4 million.
The ACFA lends money quarterly, meaning the soonest the town could get the funds is September, and the rate could change by that time.
“Potentially, it could be lower,” CAO Darrell Garceau said.
The town’s current outstanding debt is about $7.5 million, and even with the additional $3 million it would still be well within its debt and debt service limits as set out by the province, mayor Bruce Lennon said.
The full text of the bylaw can be seen in the town’s advertisement on Page 3 of this week’s Westlock News.
