City borrows to complete road financing
THE CITY is borrowing $300,000 to finish off its financial obligations tied to the construction of the intersection and access road from Hwy37 South to its Skeena Industrial Development Park.
The money, to be paid back over five years to lender the Municipal Finance Authority, is part of just under $790,000 spent by the city from 2009 to last year on the project.
The city had to commit at least $688,587 to receive grants worth the same amount from the federal and provincial governments, but its final total reached $786,292.
That amount included the $688,587 needed to qualify for matching grants and $97,705 in costs that weren’t eligible for matching grants.
The city’s engineering department had originally forecast spending $116,762 on work for which there would be no matching grants available, meaning the project came in at $19,057 below expectations, said city finance official Ron Bowles.
Aside from the $300,000 lump sum now being borrowed, the remainder of the city’s costs were covered through annual budget allocations, he said.
All told, the intersection and road project cost $2,103,466 and provides safe access to more than 2,000 acres of provincial crown land south of the Northwest Regional Airport the city has either bought or has an option to buy for resale to developers.
Although the road and intersection project was a three-way arrangement between the city and the federal and provincial governments, the city has a separate land sales profit and cost sharing agreement with the Kitselas First Nation.
Under an agreement signed in 2011, costs borne by either Terrace or Kitselas will be paid back as land on the industrial site is sold.
The city has already sold 10 acres for $250,000 to a company looking to store large pieces of industrial equipment and Veresen, a Calgary energy company, has told the city it wants to install a gas-fire power generating plant on land in the park. The Kitselas have also expressed an interest in buying land themselves.
But the biggest land deal has yet to be developed and that concerns the possibility of selling half of the park, 1,000 acres, to a Chinese economic development zone. Kitselas and Terrace officials signed a still-confidential memorandum of understanding concerning the sale while on a trip to China last November.
The $300,000 loan has an interest rate of 1.72 per cent.