City Council set to use Alternative Approval Process towards Infrastructure Loan financing

City Council members made quick work of moving forward on their Loan Authorization program towards the next level of water infrastructure projects, authoring the use of the Alternate Approval Process towards moving the bureaucracy forward.

The two elements that make for the AAP option include the replacement of 26 kms worth of critical water and sewer infrastructure starting in 2023 and their efforts towards the water piping repacment project. 

The City is pursuing contributory Federal funding for the water piping replacement as well as sewer piping replacement. As a condition of possibly receiving Federal funding, the Federal government requires the City to contribute towards the expected overall costs of the 26 km replacement project 

The details towards how that will work were outlined in a Report for Council that made for part of Monday's Council Session Agenda. 

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The city will be raising water and sewer rates annual as of 2024 towards the work and repayment of loan.

Water infrastructure replacement:

Given the water utility is driving the undertaking, the debt is proposed to be funded through a 60/40 split between the Water and Sewer Utilities, or a 7% increase to Water fees and a 4.5% increase to Sewer fees in order to make the annual repayment over 30 years. This translates into an additional $35 for water fees and $21 for sewer fees annually in 2024 (net of discount).

Linear Liquid Waste Infrastrucure:

 The City’s contribution is $40M which will be for sewer replacement. Debenture financing is expected to be taken in stages to match the proposed works plan. The estimated increases to Sewer rates to meet annual repayments of the initial and each successive debenture is as follows: 

The full scope of the extensive documentation related to the two projects and the AAP consultation towards it can be reviewed from the Council Agenda from Monday night starting on page 161.

Both Mayor Pond and the City's Chief Financial Officer Corinne Bomben spoke to the loan initiative, mostly reinforcing the key elements of the report and noting of the deadline for any community engagement towards it of August 14th at 4:30 PM.

"What you have just put on the floor  is the approving the ad that goes in the paper and will also be on our website for both of the loans and its approving also the form that people can  fill out if they disagree with the city going forward with the borrowing.

And it also establishes the number, being 10 percent of the electors that must sign to the negative, for the approval of the loan for Council to consider it and to possibly go forward with a referendum" -- City of Prince Rupert CFO Corinne Bomben

That ten percent of electors makes for a number of 1,029 

Mayor Pond explained the difference between the two options:

"Whenever Council borrows money beyond its term basically, it requires approval of the voters.  

There's two methods to do it. 

One is to go directly to referendum which is a cost, 40,000 dollars roughly, 40,000 dollars and we have a referendum and people vote.

Or, there's an Alternative Approval Process which is to the negative. 

Which is we assume we'll go ahead with it unless 10 percent of the registered voters, in this case ... 1,029 fill out the proper forms and register an objection by a certain time in which case we could go to referendum" -- Prince Rupert Mayor Herb Pond

None of the council members spoke to the process prior to providing their assent boards moving it forward on Monday evening.

Residents will soon see advertising on the city website and through local media to advise the public of the details noted above.

The Alternate Approval Process has been used a number of times now by council to move forward on such loan requirements, with Council making use of it to reduce the need to pay for a referendum unless enough of the public offer their resistance to the AAP option.

So far in the past instances the pubic has never forced an issue to the referendum stage.

The introduction of the Twin AAP initiatives and additional comments towards it can be reviewed from the City's Video Archive starting at the 2 hour, 3 minute mark.

More notes on the City's infrastructure plans can be reviewed here.

A look at other notes from Monday's Council Session can be explored here.