TAMRMS#: B06
9.2
REQUEST FOR DECISION
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Bylaw 26/2024 Lakeview Business District Servicing Borrowing Bylaw (2nd & 3rd Readings)
Presented by: Brenda Barclay, Manager of Financial Operations
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RECOMMENDED MOTION(S)
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1. That Bylaw 26/2024, being a Borrowing Bylaw for Lakeview Business District Servicing, be read a second time.
2. That Bylaw 26/2024, be read a third and final time.
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SUMMARY
The purpose of this report is to bring forward an item from the October 15, 2024, Regular Meeting of Council. This Bylaw received 1st reading on October 15, 2024, and is being brought forward for 2nd and 3rd reading.
ALIGNMENT TO COUNCIL DIRECTION OR MANDATORY STATUTORY PROVISION
On October 15, 2024, Council passed the following motions:
BL-24-026
That Bylaw 26/2024, being a borrowing bylaw for Lakeview Business District Servicing Bylaw, be read a first time.
BACKGROUND AND DISCUSSION
Please refer to the Agenda Report previously distributed on October 15, 2024.
STAKEHOLDER COMMUNICATIONS OR ENGAGEMENT
The borrowing bylaw was advertised in accordance with provisions detailed in the Municipal Government Act (MGA) as well as Council Policy C-CAO-22 Borrowing Bylaw Advertising.
The borrowing advertising timelines are listed in Attachment 2.
IMPACTS OF RECOMMENDATION(S)
Please refer to the Agenda Report previously distributed on October 15, 2024.
Financial:
The City will be looking to borrow the funds from the Alberta Treasury Board for a term of up to 20 years. The actual interest rate will be based on current posted rates at the time of borrowing, and advancement of funds and the term will also be selected at that time.
It is important to note that the borrowing bylaw sets the maximum amount that may be borrowed for a project. Any project costs in excess of the approved project charter amount will require Council approval in an open meeting. Without this borrowing contingency, these approvals would require a new borrowing bylaw. An approved borrowing bylaw creates no obligation to borrow any, or all of the amount. Actual borrowing will be aligned with total project costs, cash flow needs, and may be secured in smaller denominations as the project proceeds. This ensures that the City only borrows what is needed when it is required.
The City is responsible for 100% of the repayment of the project, of which 76% of the cost is offsite leviable and 24% is non-offsite leviable. The debt servicing of the offsite leviable portion will be funded from the off-site levy recovery fund and the non-offsite leviable portion will be funded from taxes. Based on the assumption that a 20-year term will be chosen, that the current posted rate remains the same, and the cash flow needs of the project are in line with the approved capital charter, the annual tax impact for debt servicing is expected to be $797,082 in 2027 and $484,755 for 2029.
Provincial legislation requires municipalities to calculate a debt limit and a service on debt limit and to stay within those limits. In addition to the MGA regulations, the City of St. Albert Council Policy C-FS-03 - Debt Management imposes further restrictions on the use of debt financing. Policy restriction stipulates that the City will stay within 85% of the provincial limits overall. The new levels of debt contemplated for the City against these various limits, presented in the attachment titled Debt and Tax Impacts, demonstrates that the additional proposed debt for the Lakeview Business District Servicing is within MGA and City limits.
Compliance & Legal
Section 254 of the MGA states that “No municipality may acquire, remove, or start the construction or improvement of a capital property that is to be financed in whole or in part through a borrowing unless the borrowing bylaw that authorizes the borrowing is passed.” In accordance with MGA subsection 251(3), a borrowing bylaw must be advertised, unless the term is five years or less (section 257), then advertising is not required. Therefore, Bylaw 26/2024 had to be advertised, with time allowed for a petition before the bylaw is presented for second and third reading.
Council Policy C-CAO-22 Borrowing Bylaw Advertising further stipulates that an initial advertisement of the bylaw must take place within 10 days after first reading (the “Policy initial advertisement stipulation”) and that the two statutorily mandated advertisements will be delayed such that electors are afforded a full 60 days to present a petition if desired. The advertisement timelines outlined in attachment 2 were followed.
A petition was not received during the petition period; therefore, this Bylaw 26/2024 is eligible for second and third reading at this time.
ALIGNMENT TO PRIORITIES IN COUNCIL’S STRATEGIC PLAN
Initiative aligned with Strategic Plan: Lakeview Business District Servicing
Expand opportunities for employment and economic growth with land development that attracts a mix of industries and businesses. This strategy includes advancing the development of Lakeview Business District
ALIGNMENT TO SERVICE DELIVERY
B.4.2.d - Investment and Development Readiness
Reducing barriers to investment or development in St. Albert by taking actions to address any current gaps such as infrastructure, servicing capacity, land availability, etc.
D.2.2 - Off-Site Levy Program
Support growth and development by administering the City’s off-site levy program for essential infrastructure needed.
IMPACTS OF ALTERNATIVES CONSIDERED
N/A
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Report Date: January 21, 2025
Author(s): Brenda Barclay
Department: Financial and Strategic Servies
Department Director: Anne Victoor
Managing Director: Diane McMordie
Chief Administrative Officer: Bill Fletcher