Penticton council to consider $5.1M loan for valve replacement

Eyeing $5M valve fix loan

Photo: File photo

Council will be considering taking out a long-term loan on Tuesday to fix up the Penticton Ave Pressure Reducing Valve.

Two years back, council started reviewing upcoming major capital projects that were approved in the 2022-2026 Financial Plan, looking at a borrowing a total of $12.9 million, with the valve fix costing approximately $5,100,000.

Council will decide where to obtain long term debt from the Municipal Finance Authority (MFA), and approve the final step—the resolution to request the Regional District to borrow funds from MFA on the city’s behalf, known as the Municipal Security Issuing Resolution.

Approval has already been made to borrow to upgrade and expand the Advanced Waste Water Treatment Plant and the Ridgedale Reservoir, but council waited to vote to replace the Penticton Avenue Pressure Reducing Valve until a grant decision came through.

"Unfortunately, this project was not successfully selected for a grant and requires the approved loan funds," staff's report reads.

"The total estimated annual debt servicing costs (both the DCC and non DCC portions) for the maximum loan authorization amount of $5.1M, based on a rate of 4.3 per cent for a 20-year term is $419k."

Council will discuss the loan on Tuesday.

Photo: City of Penticton