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SOMBA K'E/YELLOWKNIFE
City administration is asking city council to approve the borrowing of $20 million to pay for much-needed upgrades and replacements to failing infrastructure over the next five years.

The municipal services committee deliberated for more than an hour on a 10-page memorandum Monday which recommends that upgrades to the water treatment plant and repairs to roads and sidewalks be addressed by 2016 or 2017, as opposed to 2023.

Council will consider at its next meeting whether it will support administration amendments to the city's capital investment plan for the 2012-2014 budget and to borrow the $20 million.

Director of corporate services Carl Bird presented a slide show called Asset Management Task Force: Addressing the Primary Infrastructure Gap.

In it he stressed that linear infrastructure, or infrastructure that is concerned with physical pieces underground, are in many cases in dire need of replacement. This is especially the case with corrugated metal piping associated with the city's water and sewer system.

Bird also pointed out that roads and sidewalks would be fixed in the same time frame, stating that some routes in town are in a failing state, most notably Dagenais Court and Deh Cho Boulevard

The city has said that as of 2012, it faces an infrastructure deficit that is projected to be at $74 million by 2016. This represents about a 10 per cent deficit of the $756 million worth of infrastructure assets owned by the city.

Of the deficit, $42 million is in need of catch-up investment toward replacing water and sewer pipes.

Under the GNWT's 2011 public water supply regulations, the city is required to build a water treatment plant, which will cost the city $22 million. As well, Pumphouse No. 1 requires upgrading.

Council was generally in agreement to proceed with the recommendations, however, there was some hesitancy because a formal asset management plan - which will put all the city's infrastructure needs in complete detail - has not been completed.

City councillor David Wind, said he would not support such a bylaw and that the question of borrowing should go to the public before second reading. Traditionally, the city has been paying for its capital costs like infrastructure upgrades through government transfers and tax revenues, he said.

"To then go to a bulk type of borrowing for a number of projects is a significant departure," he said.

"It seems to me we want to be sure we are proceeding along a path that voters in Yellowknife would agree with and so I can't see why council would proceed without seeking that approval from the voters to ensure they were in agreement."

Senior administrator Bob Long said it would be a decision for the minister of Municipal and Community Affairs (MACA) on whether the city would need a referendum.

"If (MACA) requires local governments to build a water treatment plant, then it isn't logical that they would then have us go to a referendum with the idea that if that referendum failed we couldn't proceed with the water treatment plant."

Last year, Yellowknifers rejected the city's request in a referendum to borrow up to $49 million to put toward a district energy system to heat the downtown core.

"We wouldn't prejudge the minister's authority, but he does have the authority to move the bylaw forward," said Mayor Gord Van Tighem, adding that this would be done between second and third reading of the borrowing bylaw.

Part of the city's argument for borrowing now is that interest rates are low of late - 2.75 per cent at a 15-year amortization.

"I've been hearing for quite some time now that interest rates are going to go up and in my full career this has been the lowest interest rate that I have ever seen," said Long.

Coun. Cory Vanthuyne was adamant that council sees an actual asset management plan along with a borrowing bylaw as part of the 2013-2015 budget deliberations before voting begins. Council was told the asset management plan is expected to be ready in May.

"(The recommendations) are hefty requests in my view and by supporting it today without having the plan in hand is not being responsible on my part," Vanthuyne said.

Coun. Shelagh Montgomery was in favour of supporting the task force's recommendations, saying that paying now, especially for corrugated pipe needs, is a "fiscally smart jump-start to work that nobody in this room could state to be unnecessary."

"It is not necessary for us in this instance to be waiting for a document that we already know is going to tell us to do what is presented here," she said.

Coun. Lydia Bardak noted that the city has about an eight-year record of trying to get away from borrowing to complete road works, but since then the investments to infrastructure have not kept up adequately.

"We have had an amazing track record of reducing the debt we were carrying but the cost of doing that is we have an increase in failing infrastructure," she said, adding that interest rates look better than in the past.

"I do hope the construction outfits in the vicinity have the capacity to meet our aggressive schedule in terms of their workforce."

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