OSOYOOS TIMES-January 13, 2010

By Paul Everest – Osoyoos Times

The Regional District Okanagan-Similkameen (RDOS) board of directors gave first, second and third readings on Jan. 7 to a bylaw that will allow the RDOS to apply for a loan to help pay for the planned Northwest Sewer Project.
If adopted, the bylaw will provide the authority for the RDOS to borrow up to $1,248,000 to cover the regional district’s share of capital costs for the project.
The rest of the price tag for the $6.4-million sewer project, which will extend the Town of Osoyoos’s sewage system to roughly 130 residences in the area of Osoyoos Lake’s northwest shore, will be covered by the developers of the Willow Beach and Reflection Point properties, funding from the Okanagan Basin Water Board and an infrastructure grant awarded to the project by the federal and provincial governments in 2007.
To pay back the debt created by the loan, property owners serviced by the sewer project will have to pay a combined maximum of $110,000 per year over 20 years.
Taxpayers in the serviced area will have the option to pay the entire amount upfront if they wish— a sum of roughly $8,000— or pay annual instalments of $890.
In October, the RDOS board gave approval to a motion that would have allowed for cash from rural Area A’s Community Gas Tax Funding to be used to help pay for the first phase of the sewer project.
Mark Pendergraft, director for rural Area A, said the RDOS will likely not have to use that funding and the motion was only to make sure money was available to cover any construction if the sewer project’s first phase started in the fall.
Although, he added, a portion of that funding could be used if project costs go higher than expected.
Phase 1 of the project is expected to cost roughly $600,000 and the RDOS portion of that cost is $200,000.
The bylaw authorizing the RDOS to borrow money for the sewer project must still receive consent from the provincial Community and Rural Development Ministry.
Should the bylaw be adopted, the RDOS will apply for the loan from the Municipal Finance Authority.
Jim Tarves, the acting manager of finance for the RDOS, said the authority, which is based in Victoria, only issues loans in the spring and the fall.
He added that part of the $1,248,000 sum the RDOS intends to borrow includes a “cushion” of cash to cover any additional or unforeseen costs.
If approved, the interest on the loan would be 5.12 per cent, Tarves said.
Once the ministry gives the bylaw its consent, the RDOS will have to approve a “security issuing bylaw,” which has to be in place for the board’s Feb. 4 meeting in order to meet the authority’s spring deadline for loan issuing, he said.
While the loan authorization bylaw, once approved, allows the RDOS to spend the money it borrows, the security issuing bylaw is meant to let the association know that if any financial troubles arise once the loan is issued, there is enough capital within the entire regional district to cover the loan.
One per cent of the money borrowed will be put aside as a cash amount for a debt reserve fund, Tarves said.
Pendergraft said it is hoped that construction on the sewer project will begin in the spring.
[email protected]