Council has set the cogs in motion to borrow up to $1 million for a water infrastructure.
In the 2011 financial plan, council has agreed to, and must, install a new water system that includes a pipeline from the South End to Arbutus, a central treatment plant, power supply to Arbutus and a crossing at Holland Creek.
In total the project is slated to cost around $2.47 million.
City Manager Ruth Malli said the town is currently waiting on grants to the tune of $2.4 million. They were turned down for early approval, but are still awaiting word on how much they will be receiving.
Erin Anderson, financial director for the town, said the borrowing process is a long one.
“All we are doing is getting the pieces in place so if we don’t get the grant, we will be able to go and borrow.”
Now that council has given three readings to the Loan Authorization Bylaw, approval is needed from the province before coming back to the electorate through the alternative approval process (instead of referendum). The borrowing is then facilitated through the Cowichan Valley Regional District to the Municipal Financing Authority.
The bylaw must also sit for a month before being approved.
In the June 6 council package, it is stated that it will cost $81,000 to service $1 million in borrowing based on current interest rates. The $30 increase to the water parcel tax in 2011 will help pay the debt so there will be no extra increase to taxpayers. The town has had to borrow from the authority in 2000 for sewer and First Avenue work.
The town also received word on June 9 it was awarded $375,000 from the second round of the Towns for Tomorrow money to put in a hydroelectric recovery project on the pipeline.