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Yorkton Council OKs RFP for York Road borrowing

City Administration will now begin creation of the loan agreement with the financial institution, returning with a borrowing bylaw at the next meeting of Council.
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Road construction on York Road has been an ongoing project in the city. (File Photo)

YORKTON - Following issuing a Request For Proposal (RFP) to financial institutions to borrow funds to complete the York Road Project Yorkton Council unanimously supported awarding the $12 million RFP to the Toronto Dominion Bank.

The loan will have an interest rate of 3.84 per cent, explained Ashley Stradeski, Director of Finance with the city at the regular meeting of Council Monday, adding the interest cost is just shy of $1.3 million.

At the August 19, 2024 Council meeting, Council approved the public notice and the RFP with the City's intent to borrow $12,000,000 for the York Road Reconstruction Project.

Proposals were received from eight different financial institutions, with 19 different options in total for financing, including fixed rates, variable rates and CORRA Swap rates, noted Stradeski.

Given the interest rates above, the lowest interest rate is TD with their CORRA Swap option at 3.84 per cent. The lowest rate would lead to the lowest cost of borrowing, resulting in best value for the City, he added.

The financing is required in order to pay for the work on York Road. This is a large project, one of the largest the City has undertaken, and without the planned debt financing the City would likely not have the cash required to complete this and the other capital projects which have been approved, detailed a report circulated to Council Monday.

The funding is in place in our capital budget to make approximately $2.5 million in annual loan payments without increasing taxes, noted Stradeski.

City Administration will now begin creation of the loan agreement with the financial institution, returning with a borrowing bylaw at the next meeting of Council.

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