Yorkton Council took its first look at its 2016 Capital Budget, and it calls for a significant investment next year.
“Management is proposing a total Capital Budget of $19,634,000,” said Shannon Bell, Director of Finance with the City, a Council’s Committee of the Whole meeting Monday.
In terms of financing $1,424,580 would be funded through reserves on hand, $1,609,700 being funded through the utility reserves, $4,085,000 being funded through existing Capital allocations and the remainder $12,514,720 being funded with long term debt, she added.
Bell said the proposed Capital Budget would mean the City borrowing money to fund the projects.
“This budget will require the City to secure long term financing to be able to complete all the projects proposed. Also at this time Management is looking at situations where we could combine projects to be done at the same time to achieve significant savings in costs,” she said.
Since the City would be looking to borrow $12,514,720 to complete the proposed projects it would need to budget for the loan payments required
“Currently the Capital Budget includes a $1,560,000 internal loan payment for the drainage work that we have done and are currently wrapping up,” said Bell.
“At the end of 2015 there will still be $3,631,253 owing on the internal loan.”
The internal loan was scheduled to be paid in full after the 2018 payment.
“We are proposing to combine this internal loan with the $12,514,720 shortfall in funding in the 2016 Capital Budget. The loan that we would require would be approximately $16,200,000.
We could use the existing $1,560,000 that is allocated to drainage to make the payments on the new debt over 13 years. We would require the use of the $1,560,000 until 2028 instead of only to 2018,” said Bell.
Council was unanimous is passing a motion calling for management to refine the costs and required long term financing associated with the proposed Capital projects and present a revised 2016 Capital Budget to a future Committee of the Whole meeting.
