The city needs to borrow about $7 million for infrastructure repairs and new vehicles, but residents will have a chance to kibosh that plan.
During Monday night's meeting, city council approved going ahead with the method requiring those against taking out the loans to counter petition the city, known as the alternate approval process.
Any time the city needs to take out a loan from the Municipal Finance Authority for a term longer than five years, it requires constituent permission.
The city wants to borrow $1 million over a 20-year term to make repairs to Foreman Road, widening it to safely have two-way traffic and addressing landslide areas above the CN Rail crossing.
"Foreman Road has had ongoing stability concerns and high maintenance costs," said a report to council.
Repayment would begin in the spring of 2017 with annual payments of about $61,500.
Two more loans worth a combined $6 million are also being considered to finance replacing vehicles in the city's fleet. The 10-year terms would start repayment next year with annual payments of about $245,000 and $420,700, respectively.
City staff recommended using the alternate approval process to get elector consent instead of putting the asks to a referendum, which costs more money and staff time. A referendum can cost up to $70,000 versus about $1,600 in advertising costs for the alternate approval process.
Unlike a referendum, where voters can vote for or against a project, the alternate approval process requires those who are against something to submit petitions. If 10 per cent of electors submit petitions, the loan won't go ahead unless the city holds a referendum and gets assent that way.
Coun. Albert Koehler voted against the rest of council on Monday night in giving the go ahead for the alternate approval process, preferring to see the issue put to a referendum.
Koehler cited the 2012 attempt to borrow $3.5 million for a dike along River Road that was ultimately defeated through the alternate approval process, saying the process doesn't work.
"Doing that (borrowing) without getting our residents involved and having a referendum for me doesn't make sense," Koehler said.
Coun. Garth Frizzell backed the group's decision to use the counter petition method but said he also wasn't a fan of the alternate approval process "because it does shift the onus from proving that there's a case for it to proving there isn't a case for it."
But these two loans aren't really comparable to the dike project, said Coun. Terri McConnachie.
"We're talking about replacing a rotting roof, not buying a new hot tub," she said.
Replacing aging vehicles has been an issue of city council scrutiny for multiple terms and was brought to the forefront again last year in the review conducted by Mercury and Associates.
The consultants' review found the city's fleet was older than it should be and that the five-year loan practice was slowing down the replacement process.
"Replacements have been significantly curtailed over the last several years, most likely due to concerns that the [reserve] balance would not be sufficient to fund additional loan payoffs if new approvals were acquired using the current approach," said the Mercury report.
There was another option for both sets of loans, noted Coun. Jillian Merrick, and that was to shorten the loan period to five years, "which I don't think is palatable to council either because of the sticker shock associated with that," she said. "This whole process is really aimed at using some of the lowest interest rates available in the marketplace to reduce the financial burden of this investment over time, rather than paying for it all upfront."
Once the proposed loan authorization bylaws are approved by the Inspector of Municipalities, they will come back to council for a report on the necessary timelines and alternate approval process. Once the process is formally started, voters have 30 days to submit counter petitions to city hall.
