Spreading out $1 billion in water utility borrowing over several years might be more appropriate given the budget challenges ahead at City of Calgary, said one city councillor.

According to budget documents provided last week, a proposed borrowing bylaw coming up next week would authorize the City of Calgary to borrow up to $1,038,718,000 for a maximum term of 25 years.

One bylaw is asking for $612,556,00 for water investments in new communities as the repayment plan is through off-site levies. Off-site levies are the tool to charge back developers for underground services delivered by the City of Calgary.  The other bylaw is for $426,162,000 and would be repaid through user fees.

The latter bylaw is for capital maintenance projects, including pump station upgrades, electrical upgrades, and plant capacity optimization to existing Calgary utilities.  According to a CBC Calgary story, it also includes funding for two new feeder mains and a new water treatment plant. Design work isn’t complete, and the new plant likely wouldn’t be operational for 10 years.

Ward 1 Coun. Sonya Sharp said Tuesday that water infrastructure is a sensitive topic right now. Sharp, along with councillor Terry Wong have spearheaded an effort to review Bowness and Montgomery infrastructure – including water – to ensure that there’s enough capacity to handle future redevelopment.

Sharp acknowledged that utilities borrow money regularly to cover capital costs. However, given that plans are still being formed and things like interest rates and labour activity are in flux, Sharp said that it might be better to borrow the money when it’s needed. Right now, she has an issue with how much is being sought and when.

“If we’re going to just build a water treatment plant and not fix what’s going on, I have issues with that,” she said.

“I would like to see this a little bit more spaced out with the design and when they’re ready to build it, come and build it.”

Questions warranted on debt situation: Mayor Gondek

Ward 11 Coun. Kourtney Penner said that this $ 1 billion ask for water utilities isn’t a new number that’s coming forward. It’s one that she said has come up before during city council’s strategic sessions dedicated to budget deliberations.

“This is a conversation that’s been going, really spurred on to do that deep dive into the estimates needed to replace critical water infrastructure,” Penner said.

“It’s not actually a new number for council. I think it is a safe number right now, and I think it’s a true reflection of the cost to upgrade our infrastructure and a long-term look.”

The question is about how it will be spent. She said the City isn’t going to do $1 billion worth of upgrades in the next two years. Penner anticipated it would be spread out over the next several years.

“We actually are looking at multiple ways in which we approach infrastructure upgrades. So, part of that is fee increases, part of that is borrowing, and the other part of that would be tax increases,” she said.

“When we look at a balanced approach about how we’re going to fund future investments, we have to look at all of the options that are on the table.”

Last week, when asked about the significant borrowing required in this budget, Calgary Mayor Jyoti Gondek said they’ll be asking more detailed questions about this bylaw when the budget comes forward next week.

“It’s important for us to be asking the questions of our finance team about our borrowing situation, what our debt looks like,” the mayor said.

“I know that they have been very forthcoming in letting us know how things look. I imagine they will continue to do that.”