TAMRMS#: B06
12.1
REQUEST FOR DECISION
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Bylaw 2/2025 Transit Garage Expansion Borrowing Bylaw (2nd & 3rd Reading)
Presented by: Brenda Barclay, Manager of Financial Operations
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RECOMMENDED MOTION(S)
recommendation
1. That Bylaw 2/2025, being a Borrowing Bylaw for Transit Garage Expansion, be read a second time.
2. That Bylaw 2/2025, 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 January 21, 2025, Regular Meeting of Council.
This Bylaw received 1st reading on January 21, 2025, and is being brought forward for 2nd and 3rd reading.
ALIGNMENT TO COUNCIL DIRECTION OR MANDATORY STATUTORY PROVISION
On January 21, 2025, Council passed the following motion:
BL-25-003
That Bylaw 2/2025, being a borrowing bylaw for Transit Garage Expansion Bylaw, be read a first time.
BACKGROUND AND DISCUSSION
Please refer to the Agenda Report previously distributed on January 21, 2025.
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 the Attachments.
IMPACTS OF RECOMMENDATION(S)
Please refer to the Agenda Report previously distributed on January 21, 2025.
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, which 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 $546,836 in 2026 and $384,170 in 2027.
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 Transit Garage Expansion 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 2/2025 is required 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 2/2025 is eligible for second and third reading at this time.
Program or Service:
If the borrowing bylaw is not passed, the City will be unable to secure the financing
required to support the project. An alternate funding source would need to be identified,
or the project would need to be cancelled or postponed.
Organizational:
If the borrowing bylaw is not approved, Project Management resources will be reassigned to other funded projects.
ALIGNMENT TO PRIORITIES IN COUNCIL’S STRATEGIC PLAN
Initiative aligned with Strategic Plan:
Not Applicable
ALIGNMENT TO LEVELS OF SERVICE DELIVERY
B.5.2 Individual and Family Supports
Financial support or subsidy programs for St. Albert residents.
E.1.1 Conventional Fixed Route Transit Services
Provision of convenient, affordable and effective public transit services within St. Albert
and to major destination areas in Edmonton, including Downtown, the University of
Alberta, NAIT/Royal Alexandra Hospital, and West Edmonton Mall.
E.1.2 Handibus Services
Specialized, shared ride, "door-to-door" transit services for residents of St. Albert, age
16+ who are unable to utilize conventional transit due to a physical or cognitive
disability.
G.1.7 Transit Fixed Asset Management and Maintenance
Maintenance and upgrade of transit fixed assets to ensure safe, well-maintained,
well-functioning assets for residents' enjoyment.
G.1.8 Transportation Network Asset Management and Maintenance
Management and stewardship of the City's asset management program. This includes
the establishment of the corporate asset management framework, the strategic asset
management plans and the operational processes required to maintain existing assets.
Additionally, asset stewards work to maintain city assets to city standards. All aspects
of asset maintenance, risk, depreciation, and field observations are incorporated into
asset management practices to ensure a consistent forecasting approach is maintained throughout the City of St. Albert.
IMPACTS OF ALTERNATIVES CONSIDERED
ALTERNATIVE 1: Choose an alternate level of debt and identify sources for any
potential funding shortfall.
ALTERNATIVE 2: Cancel or postpone Ligget Place expansion.
ALTERNATIVE 3: Place the building of a new transit facility into the 10 to 15 year
capital plan. Cost estimates from consultant to build a new transit facility/building to meet present and future transit standards, is estimated at $150 million.
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Report Date: April 1, 2025
Author(s): Brenda Barclay/Tom Kumka
Department: Financial and Strategic Services
Department Director: Anne Victoor/Tim Saunders
Managing Director: Diane McMordie/Dinu Alex Philip
Chief Administrative Officer: William Fletcher