Tuesday, July 13, 2010  
   Volume 80 - Issue 28 Website:www.passherald.ca   email: passherald@shaw.ca   $1.00   
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Quote of the Week
“I find this a little bit ridiculous. But thats the game we’re playing here.”
- Gordon Lundy, CAO  
- on the need to borrow   
$2.6 million   

 

 
The municipality has stumbled into its second cashflow problem within a year, again due to the timing of grants, and council has approved the short-term borrowing of $2.6 million to get through the rest of 2010.
Finance Director Marion Vanoni and Chief Administrative Officer Gordon Lundy explained the situation to council at their July 6 meeting.
Lundy said that the province has delayed the sending of MSI and Stimulus grant money. He said that he had been expecting the MSI money, but was recently told by the province that they could no longer give him an expected date.
He said that he has learned that the Stimulus grant money will not be paid out until 90 days after the submission of invoices, and that in the meanwhile the municipality needs to pay its contractors.
"I find this a little bit ridiculous," said Lundy. "But that's the game we're playing here." He expressed frustration at the government saying they are helping the economy while they hold back funds.
 
One source has told the Pass Herald that the municipality should have been aware that this cashflow shortage was coming, as the Stimulus grant agreements stated that funds would not be provided until 90 days after invoices are submitted.
In order to pay for capital projects that have been completed, such as the water and sewer project in west Blairmore, the municipality has decided to borrow $2.6 million. The money will be paid back when the grant money is received later this year, no later than December 31, 2010, assuming that the amount of the grants equals what is expected.
Vanoni told council that the municipality is still able to borrow at a very favorable interest rate. Lundy said that any interest incurred through the loan will be added to the capital project costs and submitted to the government for reimbursement.
Council voted unanimously to approve the borrowing, passing all three readings of a borrowing bylaw.
In October of 2009, council approved the short-term borrowing of $1.9 million, to cover a cashflow shortage until grants were received in the spring of 2010.
The current debt of the municipality, according to the latest borrowing bylaw, is approximately $1.7 million, none of which is in arrears.
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   Volume 80 - Issue 28 Website:www.passherald.ca   email: passherald@shaw.ca   $1.00   
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