A trunk sewer line will join the short list of projects St. Albert has borrowed money for in recent years.
Council unanimously said yes to the final readings of the borrowing bylaw, which will allow the City of St. Albert to borrow for the sewer trunk line known as the Phase 3 North Interceptor Trunk Line or Project 9 for short.
The plan is to borrow $30 million for a period not exceeding 20 years. The other $10 million of the estimated $40 million project will be funded from the city’s Offsite Levy Recovery Fund.
A more detailed cost estimate should be available once the detailed design work is done on the sewer line. That design work should be done later this summer.
Mayor Nolan Crouse called it a watershed moment, but said he’s been anxious about going into debt, the policy against taking on debt, worries over potential tax or utility rate increases and the possibility the city could get addicted to borrowing.
The fiscal plan developed by staff is supposed to avoid and mitigate any tax impacts by servicing the debt through recovered offsite levies.
“The fact that this is a non-tax supported debt is critical to me to vote yes,” he said, but did note St. Albert taxpayers are “taking on the full risk here” if things don’t go well.
The city only has two other debt-funded projects currently on the books, one for Servus Place and the other for Ray Gibbon Drive.
Coun. Cathy Heron called it a consequential moment for the city, but said she was comfortable with the model developed by staff. She said she didn’t think the city would get addicted to borrowing.
“Borrowing should not be taken lightly,” Heron said.
Project 9 is expected to help kick-start developments in the city, particularly along the western boundaries. It will add needed capacity to allow developments to go ahead.
“There’s going to be no development at all in St. Albert if we don’t agree to this,” said Coun. Sheena Hughes. While she has some trepidations that there could be tax increases if development doesn’t go well, she said she appreciated the steps taken to try and mitigate that risk.
Coun. Bob Russell said he had no hesitation in supporting the move.
“This is the type of development that is best suited for long-term debt financing,” he said.
Coun. Tim Osborne confessed to being somewhat conflicted. He said he understands the project will help move St. Albert towards the goal of an 80/20 residential/non-residential tax split, but worries that other capital projects could be stymied because the city has borrowed for this project if councils get scared away from adding future debt for infrastructure like libraries or arenas.
“I think we need to understand that there’s some choices being made here,” Osborne said.
Developers with projects that would have needed the extra capacity Project 9 will add to the city’s sanitary system were happy to hear council went forward with funding.
Jonathan Lay, development manager with Genstar, said that company agrees with the mayor that this is a watershed moment.
“New developments like Riverside, South Riel and the Employment Lands invest many millions of dollars into St. Albert and its economy,” Lay said in an email. Genstar is developing Riverside, but Lay noted the approval will also allow other developments, like one in South Riel, to proceed.
Lay noted that developers will cover construction and borrowing costs for the project via the payment of their offsite levies.
GWL Realty Advisors is building a business park in South Riel. Paul Derksen, a development manager with the company, said GWL is pleased that council has made the funding decision because it gives the company certainty and the needed long-term sewer capacity for the project.
“Obviously we can do things on an interim basis, but that’s not ideal,” Derksen said.
He said GWL is currently seeking permits so it can start building soon.
“We are definitely pushing to build buildings as soon as possible,” Derksen said.
