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The Regional District of North Okanagan will be investing government grant money it received in advance – it’s an attempt to offset rising costs of a water filtration project.
RDNO general manager of finance Stephen Banmen told the board in Wednesday’s meeting that “$11.2 million showed up in our bank today.”
In an email to Castanet, Banmen explained that the funds go back to November 2021 when the RDNO received approval for a $30 million federal/provincial grant for filtration at the Mission Hill Treatment Plant.
The project is still underway today with a total price tag of between $85 and $100 million. The RDNO board plans to seek voter assent to borrow up to $18 million, which won’t be paid back through taxation, but rather through water rates which have debt repayment worked into them.
Amid rising costs, the district asked for an advance of the $30 million while continuing to look for additional grants.
“The RDNO requested an advance on the approved grant in late 2023, so that we could earn an investment income to help offset rising costs,” said Banmen in an email. “Generally, grant funds are only received after costs have been incurred and claims for reimbursement have been submitted.”
In 2024, the district learned its request was not approved.
About a year later that changed. Just last week, the province approved an 83.5 per cent advance in the provincial portion of the grant, which works out to be $11.2 million.
All of the interest earned from the advance must be tracked and go towards funding the project.
“In essence, the grant has increased based on the investment returns we earn on the $11.2 million until the funds are spent. The actual amount that is earned will be dependent on the timing of construction, the project’s cashflows and our investment return,” said Banmen.
“I suspect it will end up generating at least $1 million in additional funding.”
Banmen said he doesn’t expect the advance to impact the amount the district seeks to borrow through voter assent. That $18 million is contingent in nature and the actual amount borrowed will depend on the final project cost, reserve funding allocations and any other grants received.
