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October 27, 2017 11:25 pm

City Looks to Long Term Loans for Some Capital Projects

Monday, April 11, 2016 @ 6:00 AM

city hallPrince George, B.C.-  There are  five different capital projects for which the City of Prince George would like to borrow money to complete.

Council will be asked this evening to approve a method  for gaining elector support   not for the amount of money to be  borrowed, but for the lengthy terms of the  loans.

Here are the five projects,  the  amount to be borrowed, length of term  and  annual  debt servicing costs:


Project Amount Length of Loan Annual Debt Servicing  costs
Mobile Equipment replacement


$4,570,279 10 years $495,574
2nd Ave Parkade Upgrade


$2,725,000 20 years $179,348
Plaza Parkade Upgrade


$1,170,000 20 years $ 77,004
Kin 3 Arena Floor Replacement


$1,050,000 20 years $ 69,106
Willowcale/Haggith Creek Upgrade $1,800,000 20 years $118,468


If all  five loans are approved,  the City’s debt servicing costs  for these projects will be $939,500  in each year of the first ten years until the  Mobile Equipment Replacement loan is paid,  and $443,926  for  each year in the next decade  to pay off the other  loans.

Under the Community Charter, municipalities are required to  have elector support for any loans with terms longer than 5 years.

The two options  for gaining that support are  a referendum ( at an estimated cost of $60-$70 thousand), or  the alternate approval  process.   Under the Alternate Approval process,  10% of the electorate must register opposition to the  project in order  to prevent  the loan.  The cost of this process  is  under $3,000  with the costs largely  for advertising the process.


Should one generation consume beyond its means and either expect or hope that the next generations will somehow pick up the tab?

-Chris Martenson

ht tp://www.peakprosperity.com/martensonreport/exponential-money-finite-world

    No, we should be able to pay for everything we consume fully from the all the incomes distributed in the course of producing it. But we currently CAN’T. The financial system, as it currently operates is NOT fully ‘self-liquidating’ ~ and become progressively more so over time.

    So what’s the solution to that? Stop consuming anything that can’t be fully paid for from incomes already distributed? Which means, and can only mean, there’s no sense in producing what can’t be fully consumed. So we stop doing that, too. What effect would that have on our economy, and those who thirst after ‘jobs’?

    Or do we recognise that the current financial set-up is flawed ~ it doesn’t do what finance is supposed to be able to do ~ REFLECT physical reality? And find a way to better make the ‘figures’ properly reflect the ‘facts’.

You should never finance something for longer than it’s life. Financing equipment over 10 years is nuts. That’s like getting a 10 year car loan. That car might last 10 years but not without a lot of repairs. Furthermore with the interest rates so low right now they are probably further ahead to finance with the equipment supplier/manufacturer as they usually give good deals. That would be like when Ford offers 0% financing vs what a bank would charge.

I’d also like to know more about the $1.8k Creek project. The others seem self-explanatory.

    Where have you been Rip Van Winkle? There are already car loans with 7 year terms. I expect those terms to be 10 years or more within the next decade due to the continuing stagnation in the growth of most workers wages.

    So, a 10 year term for the replacement of major mobile equipment does not sound unusual in the slightest.

    0% financing? I guess it is true that one is born every minute.

    The only people in this world that give 0% financing are called mom and dad. The dealerships just tack the financing premium onto the price of the vehicle. Believe me, you’re still paying interest, only now you don’t know how much because it’s hidden from you.

    I got some snake oil I’ll sell you real cheap. It’s 100% organic and if you buy the 1 litre bottle, I’ll give you a 10% discount.


Seems to me that the Parkade upgrades should be borne by the users.

I am with you on this gitterdun. Sure seems like a lot of money to spend to fix up a small part of the roadway.

Shrink the extent of city limits back to 1975 borders. Why pay to maintain areas that bring in less revenue than the costs to maintain them. We know now that we will never be a metropolis so start acting like a city of 80,000.

Capital costs for mobile equipment – can’t be snow clearing equipment as that is a whole new line on our property taxes

How many of these projects could be part of the new “hard” and “soft” infrastructure funding from the feds? Or are they hoping to capitalize on some major “soft” infrastructure for the cash =cough=PAC=cough=cough=

This is bad idea.

“Stop consuming anything that can’t be fully paid for from incomes already distributed? Which means, and can only mean, there’s no sense in producing what can’t be fully consumed.”

It appears that all of the projects are maintenance projects – replacement of equipment, upgrading of buildings and roads as well as replacement of a floor. None of the costs go to tearing down buildings or getting rid of equipment altogether. That means that the “projects” are fully consumed because they have reached the point where they are no longer reasonably usable, will begin to deteriorate more quickly, will do damage to users’ vehicles, will cost more per annum to patch, etc. The options thus become to abandon them without replacing, tear them down and replace them to today’s standards, sell them to the private sector, etc.

I see this the same as the fiasco we went through with the road maintenance not being covered and having to borrow for that. I believe we are now more or less weaned off that and have increased taxes every year in order to pay into allocated maintenance accounts.

What we have failed to do is create such purpose made accounts to fund such maintenance items.

Given that, we have to give consideration to the fact that municipalities have access to some very low interest rates. In fact, when one compares those rates to the inflation rates – not the cost of living increases but the inflation rates specific to the types of projects such as heavy equipment, construction, etc. – it is a toss-up whether collecting taxes and setting them aside at very low GIC rates and removing those monies from the local economy earlier than needed, or purchasing the upgrades (and even new projects) through borrowing makes a significant difference.

BTW, I would like to see administration present both scenarios to Council for once. They never seem to.

I would be concerned. Lynn Hall liked the budget where Justin Treadeau
will spend 30 billion, yes, 30 billion when Canada doesn’t have any money.
Does this mean the city will spend foolishly? Have they spent foolishly
in the past. WE are in debt big time over the winter games. Now we need loans. I say no, if we don’t have the money, don’t borrow.

It is so true, that our city council feels pressured to do everything for everyone. Well, stop thinking like we are a city of a quarter million. Start living with in your means.

OK, the equipment is not brand new, have a strategic plan to make it last a few more years, and replace one or two pieces at a time, not because the time clock says, it needs to be replaced.

The ice rink, well, duh, you knew about it for how many years. and now that it is too late, you need to borrow money to fix it. That is stupid,

Parkade, have a master plan and do it in phases.

Willow Cale, who uses this bridge? Does it need to be done, or a want list. if it is Forestry use that is overloading the bridge, put a weight limit on it, the bridge will last longer, if the ministry wants to take the traffic off of the other roads, they can put up the money, look for hand outs.

if it goes to vote, like it should, my vote is no.

    The contradictions in your rant are hilarious.

ok, I’m no expert on social media, but if the city is trying to sneak it out with the alternate, plaster it on Facebook and lets shoot it down.

“NO, means no to borrowing money against our children’s future city”

    If people like you were in charge, “our” children (not that I have any) wouldn’t have a city, past, present or future.

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