Council approved the consolidation of two loans into a single $14-million loan made to the Olds Institute (OI) for the installation of the town's fibre network, at a special council meeting.
OI originally received two provincial loans from the Alberta Capital Finance Authority (ACFA), which were forwarded through the town: one was made in 2010 for $6 million over a 10-year term; a second in 2014 for $8 million over a 15-year term.
OI negotiated three years of interest-only payments for the original loans, but with full payment recently coming due on the second loan, they found themselves with a "cash flow" problem, OI director Mitch Thompson told the Albertan last month.
As a remedy, the OI is renegotiating the original loans into a single loan of $14 million spread over 25 years. The new loan will also be subject to interest-only payments for the first three years, after which repayments will be about $865,000 annually, saving the OI close to $400,000 each year.
Council approved first reading of both a borrowing and loan bylaw at a June 12 meeting, and advertised the plan in two subsequent issues of the newspaper, as required by the Municipal Government Act.
The town reported that there were no questions, comments or concerns expressed by the public with regard to either bylaw.
Council passed both bylaws at the special meeting, which was called before the summer break in order to meet an Aug. 15 deadline to submit the loan application to ACFA. CAO Michael Merritt said they have been in contact with the finance authority throughout the bylaw process, and expect approval of the new loan by Sept. 15.
At that point ACFA will forward the new funds through the town to the OI, which in turn will repay the two outstanding loans in full, funnelling the funds back through the town.
OI is renegotiating the original loans into a single loan of $14 million spread over 25 years.
