Council votes to borrow $16M; Says no to cancelling Canada Day fireworks; Discusses reclaimed water charges
Council approves $16.5 million loan to rebuild reserves
Last week City Council voted to borrow $16.5 million - $10 million from the Federation of Canadian Municipalities, and a further $6.5 million from the Municipal Finance Authority – as authorized through the RCMP Detachment Loan Authorization Bylaw.
In response to questions from the public about the borrowing that were put to council prior to the meeting, Acting Mayor Gord Klassen asked staff to explain “why this is a smart strategy, would there be an alternative and what would that alternative be? Why have we chosen this route?”
Chief Administrative Officer Milo MacDonald explained that what has happened is that the city has paid the bills from its reserves for the RCMP detachment build.
“So, what this borrowing is, is a way of re-establishing the reserves that we spent in the construction process in order to support the RCMP portion of the lease,” MacDonald said. “These costs on this loan essentially fall to them, and it ends up being, or all intents and purposes, a flow-through exercise."
These loans are given out at what council described as a low interest rate through the Federation of Canadian Municipalities that have yet to be locked in.
“It’s $6 million less than our original 2020 bylaw,” Councillor Trevor Bolin noted. “Not only is it less money, not only is it being paid for, not only does it capture all of our reserves, there was always a plan of how phenomenal this building could be.”
The resolutions to approve this borrowing included a request for the Peace River Regional District to consent to the borrowing over a 20-year period, and to include it in their Security Issuing Bylaw.
Councillor Tony Zabinsky asked, for clarification, why the City needs the PRRD’s consent to borrow money.
“The Peace River Regional District basically manages the MFA [Municipal Finance Authority] borrowings that are done for our region,” explained Shirley Collington, Director of Finance. “That’s why we go through the PRRD to get approval. They then go to the MFA to borrow the money and forward it to us.”
Bolin felt that this is very good financial planning. “Our reserves get paid interest. Think of it like buying a building, renting it out and the tenants pay the mortgage. In 20 years, it’s paid for.”
Council refuses to cancel Canada Day fireworks
Citing a desire to make efficient use of staff resources, in light of the potential for future dry summers and fire bans on Canada Day, the Director of Community Services, Vanessa Harris recommended that council cancel all future Canada Day fireworks events.
In her report Harris recommended that the funds from the Canada Day fireworks be reallocated to an enhanced New Years’ Eve fireworks display and micro-grants for free community events on Canada Day.
She also cited the risk of wildfires in the area, which in the past, including 2023, have caused late-notice cancellation of the fireworks event in Fort St. John.
“It’s a little bit about the fire, and also about the efficient use of staff time,” said Harris. “Not knowing if the fireworks are going to be able to go ahead each year until a month before the event, sometimes less, we’ve already put a lot of staff resources and finances into planning a fireworks show. We can cancel the fireworks within our current contract with our fireworks contractor, but we wouldn’t get that time back.”
Councillor Trevor Bolin was the first to speak against the idea of cancelling the Canada Day fireworks display, noting that in 2009 the city began putting on the fireworks in an effort to prevent unsolicited, unsanctioned fireworks in and around the community.
“My concern with this recommendation is that if we take away that event, we’re going to have people back in the community doing it themselves. We’re going to have neighbourhoods trying to do fireworks and different things on these days,” said Bolin. “What we did worked. Undoing it, is just going back to where we were, when there was free-for-all fireworks everywhere.”
“I prefer we look at this year-by-year. If we don’t do it because of a fire season, we don’t do it,” he said.
“Have there been any issues with fireworks in the past, in town, when it’s been put on by a qualified contractor – did anything catch on fire?” asked Councillor Jim Lequiere.
Nothing significant that the public would hear about, said Harris. But after every show, the contractor scans the site, picking up any live shells and there are often little grass fires that need to be extinguished.
“It’s definitely a risk,” she said.
CAO Milo MacDonald suggested the city keep an eye on drought and precipitation conditions and make the determination early in the season whether to go ahead or not.
“If it’s a drought, let’s shut ‘er down. If it’s not, then let’s go ahead with it,” said Bolin.
However, Karin Carlson, Director of Community Services reminded council that a lot of time is spent by staff preparing for Canada Day, and in fact those preparations have already begun.
“When the manager of recreation talks about staff capacity, it does have an impact on us. Of course, at council’s direction we’ll do what your wish is, but it does definitely impact the capacity of the departments,” Carlson said.
Because the contractor orders the fireworks, Harris said that the city can cancel the contract 30 days beforehand, without any reason.
“We do typically work with our contractor to make sure they have no loss of contract. So, we’ll either extend the term of that contract, or work with them to add a little bit more of an extra couple of things to a different fireworks show,” said Harris.
Organizing the Canada Day events takes all of the programmers in the city’s departments, including Arts and Culture and one full time position from March until July to plan. The fireworks make up approximately one-third of the Canada Day events, which equates to five to ten hours per week of a programmer’s time, Harris explained.
Canada Day fireworks are one of the events that Acting Mayor Gord Klassen feels is one of the city’s strategic priorities, something it does to create community and celebrate together.
“I like the idea that we perhaps have a no-go date, I think there is a compromise there,” said Klassen. “I hesitate to cancel it indefinitely.”
The motion to cancel the Canada Day fireworks was defeated, with only Councillor Byron Stewart in favour of permanently cancelling the event.
Bolin moved that staff make the determination to cancel the fireworks on a year-by-year basis by the Friday of the Victoria Day long weekend, at staff’s discretion.
The motion was carried unanimously.
“This is something we’re going to be living with for the foreseeable future and for us to just curl up and shut down because of it is the wrong move,” said Bolin.
Council concerned proposed reclaimed water charges too high
The demand for effluent (grey water) reuse has been growing steadily in recent years, particularly in commercial applications such as oil well fracking.
In 2020, the city of Fort St. John completed construction of a disinfection and distribution system, which coupled with the previous construction of distribution main and a truck fill, allowed reclaimed water to be distributed. Since then, upgrades have been carried out to improve the quality of the treatment, and future phases will create additional distribution pumps for better distribution.
The city established rate of $3.50 per cubic metre, and it costs approximately $70,000/year to keep the facility operating. Staff noted that at this price, the facility does break even.
In his report to council on March 11, Jeremy Garner, Director of Public Works and Utilities recommended that council approve a rate increase to $6 per cubic metre “to better align with costs recovery strategies” and to offset other costs including the next phase of expansion.
The volume sold annually for the past few years has been in the range of 21,000 to 23.000 cubic metres. So far this year, the city has sold 24,000 cubic metres, a substantial increase in volume.
“I think this is too much of a jump [in price],” Councillor Trevor Bolin said.
By comparison, Dawson Creek, which also has a reclaimed water facility, sells their product for $4 per cubic metre, Garner told council.
“I would hate to see us hiking the rate up because we’re starting to sell a decent amount. I think we’re cutting our nose off to spite our face,” Bolin said. “I was here when we put the funds towards doing this facility, part of that was that it was not to generate revenue, it was to give a use to grey water.”
Bolin said he would be more comfortable if the rates were increased to $4.50 per cubic metre, if it was necessary to increase the rates at all. Too big of an increase may affect users’ business decisions, he added.
“One of the motivations is to replenish the capital reserves, because as it stands right now, the capital reserves on the sewer side are insufficient to deal with the infrastructure requirements that we’re going to have over the next few years,” said CAO Milo MacDonald.
MacDonald sees this as an opportunity to capture revenue and build up reserves in a way that doesn’t adversely impact taxpayers in the future.
“But I think it does have to be balanced, in a way that’s going to meet the market that doesn’t shock the system,” he said.
Garner noted that the BC Energy Regulator anticipates that they won’t be processing any applications to draw water from rivers and streams in the region this year, so the reclaimed water the city makes available will be even more of an asset to industry.
Council unanimously defeated the recommendation to raise the price to $6 per cubic metre, and will now await another recommendation to change the Sewer Use Regulation and Charges Amendment Bylaw, with a lower, more palatable rate increase.