The City of Armstrong is a step closer to borrowing $700,000 to help pay its portion of the fire hall expansion.
Council unanimously gave three readings to a bylaw Monday that calls for long-term borrowing for the project.
“Along with the long-term borrowing comes the costs of paying the money back,” said Coun. Shirley Fowler, finance committee chairperson.
“That is one of the items that needs to be considered in the amendments to the project.”
The city’s 2015 capital budget is increased to include a provision of $700,000 for all aspects of the expansion project, and budgeted revenue is increased by the same amount in the form of borrowing proceeds.
Interest of $10,000 for debt servicing is estimated for 2015 due to borrowing taking place partway through the year.
That interest rises to $21,000 in 2016, and the principal in 2016 is estimated at $23,500. Those fees will be collected through taxation.
There is good news on the tax front, however.
To mitigate the impact of the debt servicing, sewer fee reductions mirroring the amount of the fire hall debt servicing begin next year.
“The reduced sewer fund revenue is being offset by reduced transfers to the sewer reserve,” said the city’s chief financial officer, Terry Martens, in a report to council.
The recent end of a spray irrigation loan resulted in annual savings of $71,000, and those funds have been transferred to the sewer reserve.
“This mitigation will positively affect all property owners, except those for bare land and those not in an area serviced by the sewer utility,” wrote Martens.
Council is expected to adopt the bylaw at a special meeting Wednesday at 4 p.m.