October 20th, 2020

City considers increasing line of credit


By Jensen, Randy on March 24, 2020.

Tim Kalinowski

Lethbridge Herald

tkalinowski@lethbridgeherald.com

City council is getting set to potentially approve a motion which will increase the City’s existing credit line from its current level of $10 million to $60 million to help create a financial buffer against the COVID-19 crisis.

“We still need to maintain the operations of the City,” explained Mayor Chris Spearman. “We have to pay the employees who are dealing with the crisis on a regular basis, and keeping our city safe. So in order to maintain normal operations, to maintain a safe city, we need to maintain those expenses. But our revenues (from utilities and taxes) may dry up for some period over the summer. So that is the reason why the extension of the line of credit is being proposed.”

While most members of council agreed with Spearman, and argued for voting to approve such a motion, both Coun. Joe Mauro and Coun. Blaine Hyggen argued such a move was premature.

“I think we are reacting a little bit too soon,” argued Mauro. “I am not saying it’s not a serious issue, but it’s pretty easy to now start pointing a finger at COVID, and say ‘We need money. We need money. We need money.’ We are hearing the federal government and the provincial government making these billions of dollars of announcements in how they are going to deal with it. From my perspective, I would rather wait to see when this thing goes away, see what the federal and provincial government is doing.

“I don’t understand why we need to react with a $50-million increase in our line of credit that doesn’t have to come back to council.”

Mauro, joined by Hyggen, further argued with the City having declared a State of Local Emergency City administration already has emergency powers to draw more than the existing $10 million available in the credit line as needed.

City treasurer Hailey Pinksen explained to Mauro and Hyggen $7.5 million of that $10 million was already earmarked for the Alberta Electric System Operator as a sum which must be held in reserve against any potential challenges at the City’s electrical utility; thus leaving only $2.5 million available for the City’s COVID-19 response; thus the staff’s request for extension of the credit line to $60 million, she explained.

Councillors then voted to adopt the wording of the motion with an amendment that the matter would come back for review by city council in six months.

The motion then passed first reading by a vote of 8-1 and second reading by a vote of 7-2, but Hyggen voted against the holding third reading on Monday.

In order to hold all three readings at the same meeting the Municipal Government Act says the vote must be unanimous.

With Hyggen voting against holding third reading, this means third and final reading of the motion will now be held at the April 6 meeting in two weeks.

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