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Waiting for grant to be approved

Village council discussed details of the proposed Eighth Avenue/Center Street corridor project.

During a committee of the whole meeting on Sept. 15, 2015, in Burns Lake, village council discussed details of the proposed Eighth Avenue/Center Street corridor project.

According to Sheryl Worthing, Chief Administrative Officer for the Village of Burns Lake, it could be late fall before the municipality learns if its grant application for phase one of the Eighth Avenue/Center Street corridor project is approved.

Earlier this spring, the municipality applied to the federal government’s strategic priorities fund for $2.833 million to undertake phase one of the proposed project.

If that grant is approved, the design phase of the project would commence this winter, and construction would begin in the summer of 2016. The grant’s approval would also mean that borrowing funds for the first portion of the project wouldn't be necessary.

If the municipality’s application is denied, however, Burns Lake residents may be asked to approve a 9.1 per cent tax increase. On Aug. 11, 2015, councillors approved a motion to borrow $1.9 million and raise taxes by more than nine per cent if the grant to fund the project is not forthcoming.

If the village is required to borrow funds for the project, it must first pass a borrowing bylaw. Under the B.C.’s community charter, that bylaw would require the approval of Burns Lake voters.

During the committee of the whole meeting, village staff presented additional information about the proposed project and answered questions from council.

One of the questions asked by council was, “What is in our plan to make the streets last as long as possible?”

“We have engaged a crack sea sealing company to give us pricing for the spring of 2016 to try and get ahead of the cracks,” answered village staff. “Currently all of our budgets have gone to pothole repairs and paving patches as our asphalt deficit is large.”

Another question from council was, “With the amount of traffic that utilizes Eighth Avenue to Carroll Street and Center Street to the hospital, how much would life expectancy be reduced by simply re-surfacing the existing infrastructure?”

Village staff answered that, if base repairs and storm systems are not completed as part of the project, asphalt life could be reduced as much as 50 per cent or 13 years from a life expectancy of 25 years.

Council was also curious about interest rate risks associated with borrowing funds.

Village staff explained that all borrowing is done through the municipal finance association (MFA).

“Each new issue is for a 10-year term, meaning the interest rate is locked in for 10 years. After 10 years, the rate is locked in for five-year terms until completion. The current rate for a 25-year term is 3.5 per cent and the MFA has a history of very stable rates.”

In addition, council asked staff if there had been precedents of a regional district helping pay for projects such as the Eighth Avenue/Center Street corridor.

Staff said there are no precedents regarding regional district residents paying towards municipal infrastructure projects.

“We have canvassed most of the regional districts in the province and have found no instances so far.”

Staff added that the process to ask the Regional District of Bulkley-Nechako for funding would involve requesting a meeting with the directors of electoral areas B and E. If there is interest, council could direct staff to submit a grant-in-aid for a one-time contribution from both electoral areas B and E.

Another issue discussed at the meeting was that, according to village staff, proceeding with the current program of the Eighth Avenue/Center Street corridor project without full replacement of the water main could lead to “catastrophic failure,” either during or shortly after construction, putting the project in financial jeopardy.

“Any plan which does not include replacement of the water main and all connected appurtenances would be risky,” said staff in a report.

Council did not make any decisions regarding this issue and requested staff to bring additional information to the next council meeting.