Borrowing

Print
Press Enter to show all options, press Tab go to next option

Review of Borrowing Bylaw No. 462

The proposed Bylaw No. 462 authorizes the City of Lacombe to borrow $750,000 to purchase land at 4951 Wolf Creek Drive in Lacombe, Alberta.

Aerial

Lacombe City Council has decided to issue a bylaw pursuant to Section 256 of the Municipal Government Act in order to attract a major Canadian retailer and associated development to Lacombe.

The municipality will purchase 4951 Wolf Creek Drive, Lacombe Alberta for $3,325,000 and immediately sell it for $2,575,000 to a private developer at below market value. Agreements have been prepared between parties and the total cost to the municipality is $750,000.

In order to complete the development it will be necessary for the municipality to borrow $750,000 from an authorized financial institution. The required approvals for the project will be obtained to ensure compliance with all Acts and Regulations of the Province of Alberta.

The City of Lacombe has also taken steps to ensure accountability by requiring its financial investment be returned if project construction does not start within three (3) years.

The municipality shall repay the debt, with the following terms: 

Loan Amount
 $750,000
Term  15 years
Annual Payments  $63,737 (Principle and Interest)
Interest Rate  3.2%
Impact on Operating Budget   0.45% tax increase in 2019

 
The amount borrowed under this bylaw will be applied only to the project specified by the proposed bylaw. The bylaw comes into force on the date it is passed by Council resolution.

Council is considering this initiative in response to the number one concern expressed by citizens during recent public engagement processes – increased retail access. In light of the recent ranking of Lacombe as one of the best places to live in Canada – and the best in Alberta – Council believes this development may help address this pressing concern and help the community become even more livable

The anticipated increase in assessed value (improvement) is significant. It will help increase the city’s commercial tax base and reduce reliance on residential property tax revenues – as part of Council’s 2018-2021 Strategic Plan. The table below gives a potential range of the improvement value with the corresponding increase in annual tax revenue.

Assessment

2018 Mill Rate (8.5503)

$12,500,000

$106,879

$15,000,000

$128,255

$17,500,000

$149,630

$20,000,000

$171,006


The principal amount of the City of Lacombe's outstanding debt as of December 31, 2017, is $16,176,619, with a total debt limit of $42,055,150.

 

 

Timeline

LMS Updated Timelines

Please correct the field(s) marked in red below:

1

What do you think of the proposed borrowing bylaw? Please leave your comments in the field below.

 *
  1. To receive a copy of your submission, please fill out your email address below and submit.