YORKTON - The City of Yorkton is setting the stage to borrow $12 million to finish the ongoing York Road reconstruction.
“As a result of the budget deliberations for 2021 / 2022, the York Road Reconstruction project was added to the Capital budget,” explained Ashley Stradeski, Director of Finance with the city at the regular meeting of Yorkton Council.
This project included the full reconstruction of much of York Road, including some aspects of utilities, drainage and flood mitigation, storm sewer and more. This project was estimated at the time to be around $17,000,000 total, with the understanding that some of the project would be financed through debt, he added.
At the Council meeting of April 24, 2023, the tender for this project was awarded for $15,615,561.75 plus applicable taxes, with a project total of roughly $25,500,000 including tax, contingency, engineering fees, and more.
To-date some $15 million has been invested from the city’s 2022, 2023 and 2024 capital budgets, the water drainage budget and $4.3 million from the province through its Urban Highway Program, leaving approximately $10 million yet to fund.
Reviewing the Capital Projects and future funding required, particularly in the Water Utility, Stradeski recommended to go to RFP looking to borrow $12,000,000.
This loan amount will make the loan approximately 5.5 years, depending on RFP results and interest rates, which is still less than some of the city's initial discussions when the final project budget was discussed and considered.
“This loan amount is appropriate to ensure cash flow needs are met with this project as well as other ongoing projects,” said Stradeski.
As borrowing is needed, there are several steps the City must undertake.
The first of these is public notice, as per the Cities Act and our Bylaws, it is required to post public notice of the City’s intent to borrow prior to considering the matter.
The second step will be the RFP for debt. This RFP will be the process which interested lenders can propose financing solutions for the City, allowing a competitive process such that we are borrowing at the best rates available.
The third would be the bylaw, which must go through three readings and include the details of the proposed debt, indicating which lender, the purpose of the debt and the pertinent details such as interest rate and terms.
Interest costs on this loan would be in the range of $1.5 million, depending on rates and term options received through the RFP process, noted Stradeski.
