CRD Staff Report: Core Area Wastewater Loan Authorizations

ALTERNATIVES

Alternative 1

The Core Area Liquid Waste Management Committee recommends to the Capital Regional District Board:

1. That Bylaw No. 4374, “Liquid Waste Management Core Area and Western Communities Service Loan Authorization Bylaw No. 1, 2020” be introduced and read a first, second, and third time;
2. That Bylaw No. 4374 be referred to the Inspector of Municipalities for approval.
3. That Bylaw No. 4375, “Liquid Waste Management Core Area and Western Communities Service Loan Authorization Bylaw No. 2, 2020” be introduced and read a first, second, and third time;
4. That Bylaw No. 4375 be referred to the municipal councils of the participants for approval, and if two-thirds of approval is received, to the Inspector of Municipalities.

Alternative 2

The Core Area Liquid Waste Management Committee recommends to the Capital Regional District Board:

1. That Bylaw No. 4374, “Liquid Waste Management Core Area and Western Communities Service Loan Authorization Bylaw No. 1, 2020” be introduced and read a first, second, and third time;
2. That Bylaw No. 4374 be referred to the Inspector of Municipalities for approval.
3. That Bylaw No. 4375, “Liquid Waste Management Core Area and Western Communities Service Loan Authorization Bylaw No. 2, 2020” be introduced and read a first, second, and third time;
4. That Bylaw No. 4375 be referred to alternative approval process for the entire service area, and if approval is received, to the Inspector of Municipalities.

Alternative 3

The Core Area Liquid Waste Management Committee recommends to the Capital Regional District Board: That Bylaw Nos. 4374 and 4375, “Liquid Waste Management Core Area and Western Communities Service Loan Authorization Bylaw No. 1, 2020” and “Liquid Waste Management Core Area and Western Communities Service Loan Authorization Bylaw No. 2, 2020”, be deferred pending further information.

IMPLICATIONS

Legislative Implications

Long-term borrowing (i.e. loans with a term of more than 5 years) must be supported by a loan authorization bylaw, requiring elector approval and the approval of the Inspector of Municipalities.

Pursuant to the Regional District Liabilities Regulation, BC Reg 261/2004, as elector consultation and Provincial approval has occurred as part of establishing a LWMP, elector approval is not required for the $22.7 million loan, as it is for works implementing the plan. CRD may proceed with Bylaw No. 4374, provided the Inspector of Municipalities approves.

For the additional borrowing of $34.3 million, elector approval or a LWMP amendment is required. Elector approval can be obtained through consent on behalf by two-thirds of municipal participants’ councils; or by alternative approval process for the entire service area. In a service area of this size municipal counsel consent would require less administrative resources.

Obtaining elector approval will address the legislated requirements through this transitional period. CRD continues to undertake an amendment of the LWMP to reflect the updated long term capital plan.

Financial Implications

The loan authorizations for the provisional capital program total $57 million and will support the planned 5 year capital plan starting 2021. There are no existing capital reserves in place requiring borrowings to fund the capital plan. To enable optimization of interest and timing of long term debt issuance a temporary borrowing is also being proposed.

The timing of the debt issuance will be based on the timing of expenditures and will be dependent on prevailing interest rates at the time. Before long term debt issuance can be exercised a security issuing bylaw will be brought forward for approval. The term of any debt issuances under this loan authorization will be 15 years.

The cost of borrowing is included in the Provisional Budget to be presented on October 28 with an estimated impact of $117k in 2021.

CONCLUSION

Capital program work is planned for 2021 and ongoing. The work will be funded through a combination of requisition and borrowed funds. Timely access to the borrowed funds in 2021 is critical to meeting the capital program spending needs. To that end, a CRD Board resolution is required to commence the loan authorization process for Bylaw No. 4374, planned borrowing as set out in the Liquid Waste Management Plan; and Bylaw No. 4375, borrowing required to implement a long-term capital program for the Core Area Wastewater program.

RECOMMENDATION

The Core Area Liquid Waste Management Committee recommends to the Capital Regional District Board:

1. That Bylaw No. 4374, “Liquid Waste Management Core Area and Western Communities Service Loan Authorization Bylaw No. 1, 2020” be introduced and read a first, second, and third time;
2. That Bylaw No. 4374 be referred to the Inspector of Municipalities for approval.
3. That Bylaw No. 4375, “Liquid Waste Management Core Area and Western Communities Service Loan Authorization Bylaw No. 2, 2020” be introduced and read a first, second, and third time;
4. That Bylaw No. 4375 be referred to the municipal councils of the participants for approval, and if two-thirds of approval is received, to the Inspector of Municipalities.

ATTACHMENT(S)

Appendix A: Bylaw 4374, “Liquid Waste Management Core Area and Western Communities Service Loan Authorization Bylaw No. 1, 2020” Appendix B: Bylaw 4375, “Liquid Waste Management Core Area and Western Communities Service Loan Authorization Bylaw No. 2, 2020”