City could hit debt limit with water intake replacement, new pool

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The city will be precariously close to its debt limit if it bears the full cost of a replacement water intake pipe from the Yellowknife River and a new aquatic centre, city council was told during a line by line reading of the budget Tuesday. 

The city estimates close to $50 million will be needed for the pool, with $7.4-million in borrowing allocated for 2019, $25 million in 2020 and $16.9-million in 2021. Replacing the 50-year-old, eight-kilometre water line that runs from the mouth of Yellowknife River to the water treatment plant at 48th Street is expected to cost $27 million. The price of the replacement pipe has increased considerably over the years. 

Under the Cities, Towns and Villages Act, long-term borrowing can be approved through a referendum or by a ministerial exemption.

While the city’s debt limit is “difficult to pin down” the combined costs of a new pool and the water line would push the city “very close” to its breaking point, said Sharolynn Woodward, the city’s director of corporate services.

The 2019 draft budget puts the legal debt limit at $136 million in 2021 with an expected debt balance of $92.5 million.

The city requires taxpayer approval to borrow money for its aquatic centre, but first needs council to decide through budget deliberations where the city should source its water. The city also needs a more refined cost estimate for the aquatic centre before it can ask taxpayers to take on the long-term debt.

“We would be in a precarious position to meet those requirements within our debt limit should they all pile up at one point,” she said.

The city is currently seeking federal funding for the water line replacement, which was installed upstream from Giant Mine over concerns of contamination.

The city “firmly believes” it should not be paying for the full cost of the line replacement, said senior administrative officer Sheila Bassi-Kellett.

The GNWT’s department of Municipal and Community Affairs is responsible for assessing the city’s debt limit.

The city sought out funding from Infrastructure Canada to replace the pipeline this summer. It hopes Ottawa will cover 75 per  cent of the bill.

A 2017 report conducted by AECOM Canada Ltd. considers two source options for replacing the water intake but recommends the more expensive option from the river, rather than the $8-to $10-million option to draw water from Yellowknife Bay.

City will defer repairs on existing pool heater

The city is also deferring repairs to the heat exchanger at the Ruth Inch Memorial Pool despite the equipment nearing the end of its 15 year life expectancy.

“Is there any concern at all that it isn’t going to just crap out on us?” asked Coun. Niels Konge.

Konge asked if the city would, in theory, continue to defer its repairs to the heat exchanger until the new pool is installed.

The exchanger is the main heating source for the pool and hot tub at the pool.

Senior administrative officer Sheila Bassi-Kellett confirmed that equipment failure is still a concern if it is not replaced but that it will be deferred.

“This is not an ideal situation,” she said, adding that if it did completely break down the city would have to step in.

The heat exchangers were last replaced in 1995 and replacing sections of it is not viable, the budget shows.

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