The City of Grande Prairie has approved opening a $35 million line of credit as part of its response to COVID-19.
Mayor Bill Given says it provides the municipality with the capability to maintain cash flow in the event of the pandemic slowing things down to a crawl. It will only be used in the case of an emergency.
Given adds the options on the table were to pull current investments to help pay for things like essential services, or take the line of credit option at a low-interest rate.
“Under the circumstances, and with the council having approved moving our property tax deadline and recognizing there is a significant amount of uncertainty, our administration thought it was prudent to have this financial instrument available to us.”
Given says the decision to push back the tax deadline is a major factor in having to make borrowing decisions like this one. The money normally collected through property taxes at the end of June would be taking the place of the safety net they require.
“Ultimately, the point is to ensure the city has the cash flow available to deliver critical services that residents count on day in and day out and to do that in the most fiscally responsible manner.”
Given adds that the municipality having an open line of credit isn’t a new situation, but, the traditional limit is around $2 million. If used, it’s expected the full amount of the line of credit will be paid off after property taxes are received from residents.
