Town to borrow money for road repairs

Shannon LeClair
Times Reporter

 

The Town of Strathmore is looking to borrow funds in 2015 to help with the completion of a couple of roads projects.
“Mainly the reconstruction and hard surfacing of 4th Ave, Lakeside Blvd and 2nd St. The total budgeted cost is estimated to be $6.5 million,” said Mel Tiede, director of corporate services at the Feb. 18 council meeting. The town is proposing to apply for provincial grants for roughly $3.5 million with a balance of $3 million to be financed on a long-term borrowing basis.
“The borrowing is to be from Alberta Capital Finance on a 15-year basis,” said Tiede.
In February of 2014 the interest rate was sitting at 3.158 per cent. Over the past year that number has gone down and is currently at 1.991 per cent. Because borrowing can only be done on a quarterly basis with Alberta Capital Finance, June 15 is the next opportunity for the town to apply for the loan.
At the end of December 2014 the town had been sitting at approximately $11.2 million of long-term debt outstanding.
“The percentage of debt utilized at that time was estimated to be 33 per cent. With a debt limit of $33.3 million, and those are estimated numbers based on a future audited statement … with the borrowing of $3 million we will be adding approximately 10 per cent to that 33 per cent, we will be at 43 per cent,” said Tiede.
“We have $1.4 million scheduled of principal repayment during this 2015 calendar year and if there is no other borrowing we should end the year at approximately 38 per cent of the utilization of the debt.”
The motion was given first reading and will return to council in March for a decision.