SOMBA K'E/YELLOWKNIFE - A week after residents voted 'no' in a referendum to borrow up to $49 million, administration is recommending the city do away with the need for voter approval on future borrowing.

The recommendation calls for the establishment of a debt management plan - a plan regulated by the territorial government's Cities, Towns and Villages Act, outlining how the city's debt will be financed.

"It (the plan) allows us to make debt financing decisions during a budget process without having to go through the referendum process," said Carl Bird, director of corporate services, at Monday's Municipal Services Committee meeting. "It allows us, for normal, everyday debt issues like borrowing money for roads and sidewalks or water and sewer, to be able to go ahead and do it under this debt management plan," he said.

Without a plan, the city has to seek voter support if it wants to borrow more than $250,000.

Last week's referendum regarding the Con Mine community energy system attracted 35 per cent of eligible voters and was rejected by a vote of 1,362 to 997.

When asked about the timing of the recommendation, city councillor Cory Vanthuyne said, "I don't think they're (administration) is trying to be devious in any shape or form."

The borrowing wouldn't be for new "shiny" projects, he said, but would rather be for repairing, replacing or improving the city's infrastructure.

Vanthuyne also said he believes there would be a borrowing limit of 20 per cent of the city's yearly revenue - about $12 million - above which would require the city to go to a referendum to borrow a larger amount.

City administrator Bob Long did not return phone calls to confirm that by press time yesterday.

Even if there isn't a limit, Vanthuyne said as a councillor he wouldn't allow borrowing of $49 million to go through without a vote.

Coun. David Wind, who wasn't at the committee meeting, said in an e-mail that having voter approval for borrowing is an important safeguard for the city.

"It is vitally important that this safeguard be maintained to protect the interests of residents in the management of the financial affairs of the city," he wrote. "Residents can count on me to vote to retain the need to obtain the approval of voters for major borrowing by the city."

According to the recommendation in this week's committee agenda, the rationale for a debt management plan is that "the current methodology required to authorize debt is time consuming and costly." It says the plan is also necessary for the development of a long-term asset management plan, which the city hopes to complete by the 2012-2014 budget process.

Bird said a debt management plan would "streamline" the way the city accesses debt for municipal projects and lay out the terms and conditions for debt financing for future projects.

If the recommendation to establish a debt management plan is passed, the process for acquiring debt over $250,000 would be conducted through a bylaw rather than a referendum.

Administration acknowledges in its recommendation that residents may be concerned the bylaw will allow the city to "indiscriminately obtain debt for any purpose," but it suggests there will still be opportunities for public feedback.

"Ultimately it would have to come to council," said Vanthuyne, adding that borrowing schemes would go through a public hearing and three readings by council.

When asked whether that will provide residents enough of an opportunity to voice their opinions, Coun. Shelagh Montgomery said people participate in hearings when it's a topic that's of interest to them.

"I'm sure something that's tied to potential borrowing by the city, there will be input from the public with their thoughts on that."

Bird said council can also request a referendum for specific projects where councillors want to gauge public opinion.

The city currently has about $3 million in long-term debt - down from nearly $30 million in 1995. Its borrowing limit is two times the previous year's revenue, approximately $103 million for 2011.

Council will have first reading of administration's recommendation next Monday.

"Clearly it's a sensitive issue," said Montgomery. "I certainly recognize that, but I think maybe it's a good time to introduce it as well because people are well aware of what a referendum is and clearly

(the bylaw is) not going to go anywhere until there's some public input once it gets to council.

"So I think people will offer their advice to us or their comments to us."

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