Lethbridge City Hall. (Lethbridge News Now)

By David Opinko

City Hall increases line of credit by $50-million to meet pandemic needs

Apr 7, 2020 | 11:22 AM

LETHBRIDGE, AB – The City of Lethbridge has taken what it considers to be a proactive step during the COVID-19 pandemic.

A motion was passed 7-2 at Monday’s city council meeting to increase their line of credit from $10-million to $60-million.

Mayor Chris Spearman says, given that many businesses are closed and people are out of work right now, the city is going to be incurring some significant cash flow issues.

“When it comes to the cash flow crunch, we already want to have that in place. We want to be going to our prime lender to make those arrangements and have them in place so that, when and if that’s needed, that we can immediately call upon that and that the operations of the city aren’t disrupted.”

He adds that approximately 80 per cent of the city’s expenses are related to payroll.

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“We want to make sure that our police officers, our first responders, and those on the front lines, those providing services to our citizens and our businesses can continue and we want to make sure we are not in a financial crunch at the City of Lethbridge.”

The increased line of credit will likely be used to offset reductions in revenue.

One example of this is that council also passed a motion on Monday to temporarily waive late fees for utility payments. It was estimated last month that if 25 per cent of residential utility customers were unable to pay their bills, it would result in a reduction in revenue of approximately $7-million per month.

As for what else the money would help with, that is unknown right now, but Spearman says that is exactly the point. He wants to make sure the city is able to handle any unexpected costs or reductions in revenues that might come as a result of the COVID-19 pandemic.

The city currently has a line of credit of $10-million. $7.5-million of that has already been earmarked to meet the regulated security requirements of the Alberta Electric Systems Operator, so in essence, the municipality has $2.5-million remaining.

City Councillors Blaine Hyggen and Joe Mauro voted against raising the line of credit.

At the March 23 meeting of city council, clarity was given that, during a state of local emergency (SOLE), the city can exceed its credit limit without incurring any penalties. The SOLE was declared on March 18 in Lethbridge.

“For that reason there, that’s why I did not support [the motion],” says Hyggen. “Do I think we do need funding to get through this and for different businesses and our citizens? Absolutely, but I don’t believe that was needed as we can access it without that resolution.”

Mauro believed that the rest of city council was reacting too soon and too drastically. He said that he would rather wait to have a better understanding of what their pandemic needs are and then make decisions as needed.