SOMBA K'E/YELLOWKNIFE - Voter approval will still be necessary for future borrowing by the city, despite administration's recommendation Monday that council replace referendums with bylaws.

In the memo to the Municipal Services Committee Monday, it was stated that by establishing a debt management plan, the city would be able to authorize future borrowing through a bylaw, thus removing the need for voter or ministerial approval.

On Thursday, a senior city official, who asked not to be named, said the city misinterpreted the Cities, Towns and Villages Act, which regulates debt management plans, when writing the memo for Monday's meeting.

"Even with the debt management plan, we will still need to get voter approval," the official said. "Any debt that we enter into, other than that which is already exempt under the act, would still have to come forward for voter approval. The debt management plan doesn't change that."

According to the act, a municipality is exempt from voter approval if the minister of Municipal and Community Affairs finds the long-term debt is going toward something in the public interest, or toward something that is needed to improve or maintain public health, the environment or public safety.

The city would also be exempt if the amount to be borrowed were less than $250,000.

When asked how the act could have been misinterpreted, Mayor Gord Van Tighem said we're all human and we all make mistakes.

"Into every situation where you have humans, you'll get error," he said. "It's really good if they admit the error and fix it before it becomes reality. That's what's happened."

The recommendation for a debt management plan will be rewritten and come to council at next Monday's meeting, said the mayor. But the bylaw relating to the debt management plan will only require a modest revision, according to Van Tighem.

"It's not a substance change, but there's some clarity, I think, where a couple of paragraphs have changed position," he said. "I don't know if the words have changed."

In the proposed bylaw, as it is currently written, it reads, "The city is authorized to borrow funds in support of any municipal purpose as directed by council by way of a borrowing bylaw."

It further states that council has the authorization to direct administration to borrow funds for acquiring municipal buildings and major recreational facilities; acquiring land for municipal purposes and/or development purposes; installing new or replacing aging municipal infrastructure such as water and sewer systems and roads and sidewalks; capital investment in a municipal purpose corporation - such as a municipally-owned utility - and short-term financing requirements for operational expenditures.

When asked about the wording of the bylaw, which suggests that council has the power to authorize borrowing without voter approval, Van Tighem said, "The need for the referendum doesn't need to be mentioned in the bylaw if it's in the act."

He also added that there are checks and balances in all legislation.

"One of the things about living in the North is that the public has more input here than probably anywhere else in Canada, both directly to elected people, but also to the staff people, so you're not going to take a lot of that away," he said.

Having a debt management plan in place will cut down on the amount of administrative work that needs to be done when the city enters into debt, said Van Tighem. The city's existing long-term debt is close to $3 million, but its borrowing limit is double the previous year's revenue, which is approximately $103 million for 2011.

The plan is also necessary for the city to move forward with the development of a long-term asset management plan.

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