Skip to content

Sundre council approves temporary borrowing bylaw

Sundre administration given financial flexibility and afforded opportunity to facilitate municipality’s cash flow
MVT stock sundre office
File photo/MVP Staff

SUNDRE – Better to have it and not need it, than to need it but not have it.

That, in a nutshell, is the driving philosophy behind a new temporary borrowing bylaw administration recently presented to council for approval.

Providing some background information during the regular Sept. 5 meeting, Chris Albert, director of corporate services, told council that no funds were actually being borrowed at this time, but that administration rather simply wanted to establish the ability to draw money from a pool of credit as necessitated by circumstance to stay on top of the municipality’s cash flow.

“It gives us the opportunity to have that line of credit available as well as to have those credit cards available,” said Albert.

The bylaw as presented to council grants authority for the municipality to temporarily borrow funds up to $750,000 on a line of credit plus an additional $50,000 on credit cards only to be used if needed to help meet operating expenses until general tax revenues are received, the bulk of which generally come in toward the end of May and into June.

“The purpose behind both of those (the line of credit and credit cards) is to first of all assist with cash flow, (and) second of all, assist with normal day-to-day expenditures,” he said.

“Previously, there was actually not a borrowing bylaw in place for the credit cards. We’ve added it in just because we feel that it’s more appropriate,” he said.

Any balance owing on the credit cards in the event they are used would be paid back monthly, he said.

“We don’t carry a balance on our credit cards,” he said, adding the line of credit would be repaid within a one-year timeline.

“We’ve restricted it more than what the Municipal Government Act requires of us,” he said, adding administration endeavoured to ensure the bylaw met the purpose of simply covering expenses and assisting with cash flow until tax revenues come in.

“We’re not going to always be using this,” he said.

“This is really just prudent to have the bylaw established, have the facility established, so that it’s ready to go when we need to access it – if we ever need to access it,” he said, calling the approach “best practice.”

Mayor Richard Warnock sought clarification regarding the need for the temporary borrowing bylaw when the municipality already has in place existing restricted surplus accounts.

“Stabilization funds could be used. That is always an option instead of incurring interest charges,” answered Albert.

However, going forward doing that could potentially herald unintended consequences, he cautioned.

“First of all, with those stabilization funds . . . we’ll probably need them. So, you don’t want to be utilizing them somewhere else,” he said.

Furthermore, stabilization funds with money in reserve are generally longer-term investments that are “actually doing a little bit more for us,” he said.

“So, you don’t really want to break a long-term investment,” he said. “Even if it’s a 30- or 90-day GIC, you don’t necessarily want to break that and take the hit just in order to cover operating expenses for a short period of time while you’re kind of just juggling that cash flow.”

Council went onto unanimously approve the bylaw.

Simon Ducatel

About the Author: Simon Ducatel

Simon Ducatel joined Mountain View Publishing in 2015 after working for the Vulcan Advocate since 2007, and graduated among the top of his class from the Southern Alberta Institute of Technology's journalism program in 2006.
Read more


push icon
Be the first to read breaking stories. Enable push notifications on your device. Disable anytime.
No thanks