Prince George city council has passed a bylaw allowing for financing of $2.8 million for a mobile equipment replacement.
The bylaw, which was passed at Monday’s council meeting (March 23), also includes financing for a civic facility general maintained van, janitorial equipment (replacement of floor scrubbers), parks water truck, a fire service rescue watercraft, and fire services wildland rescue utility vehicle.
An Alternative Approval Process to determine elector support began after Jan. 20 when council approved the first three readings of the bylaw.
Long term borrowing by local governments (i.e. loans with a term of more than five years) cannot be undertaken without “approval of the electors” so a referendum or alternative approval process is needed.
An alternative approval process is a counter-petition method where electors have to submit an elector response form indicating their position.
March 10 was the deadline for receiving Elector Response Forms in opposition. After posting public notice in a newspaper, city hall, and city website the city received only 28 responses in opposition.
Elector disapproval of the bylaw would require more than 5,846 responses in opposition (10 per cent of 58,455 electors).
The bylaw, officially called City of Prince George Equipment Financing Bylaw No. 9104, assumes an interest rate of three per cent.
The cost of the projects associated with the bylaw is $2,825,500 and would result in annual debt servicing costs of $327,399.
The $2,825,500 breaks down into:
- Mobile Equipment Replacement = $2,312,000
- Civic Facilities General Maintenance Van = $70,000
- Janitorial Equipment – Replace Floor Scrubbers = $43,500
- Parks Water Truck = $300,000
- Fire Services Rescue Watercraft = $35,000
- Fire Services Wildland Rescue Utility Vehicle = $65,000
The term 'mobile equipment' refers to any kind of equipment which driven on a roadway, other than motor vehicles, including, but not limited to automobile trailers, construction equipment, street cleaners, etc.
The city says debt financing of the city’s mobile fleet needs support council’s sustainable infrastructure strategic priorities.
In terms of tax levy implications of the bylaw, annual debt servicing costs of $327,399 would result in 0.3 per cent of future tax levy increases.
The timing of when these costs would impact the levy depends on when the work is completed and the funds are borrowed, but it is expected that these costs will impact the 2021 tax-year levy.
The annual replacement and addition of vehicles and capital equipment are financed through the MFA Equipment Financing Program. Through these financing agreements, the city retains ownership of the asset and is charged a low variable interest rate based on the Canadian Dealer Offered Rate with fixed payment schedules.
The MFA Equipment Financing Program has no fees to set up or discharge, no taxes on payments, and no penalties or fees for paying out early or making extra principal payments.
All financing agreements will be for a term no longer than ten 10 years to match the expected service life of the new mobile equipment.
