A bunch of bylaws passed at Collingwood council on Monday night involving Collus Powerstream, Infrastructure Ontario, a few town projects and a hefty amount of money may have raised some eyebrows.
But according to Collingwood CAO Fareed Amin, the bylaws were just a way for the town to hold up their end of the bargain in the Collus Powerstream/EPCOR transaction.
Back when the Town of Collingwood was a 50% owner of Collus Powerstream, Collus received a loan from Infrastructure Ontario for some capital improvements. Now that EPCOR owns the utility in full, they are no longer eligible for that funding because they are not a public entity.
“Only public entities, like municipalities and school boards, can borrow money from Infrastructure Ontario,” said. Amin. “Infrastructure Ontario was set up so municipalities can get easy access to loans for infrastructure purposes.”
“So what’s happening is that we (the Town of Collingwood) are going to assume the outstanding amount on the loan, but the costs for the loan will be repaid through EPCOR,” says Amin.
Every month, EPCOR will send the Town of Collingwood a cheque for the loan repayment, and the cheque will be transmitted directly to Infrastructure Ontario.
“We will essentially act as a post office,” said Amin.
The purpose of enacting the bylaws Monday was to assign the debt to various town projects that currently have no outstanding debt on them.
“We had to assign that debt to various town projects, just for collateral purposes,” said Amin. “The debt had to be secured against an asset. Because the utility is no longer a municipal asset, the loan that’s outstanding has to be secured against other municipal assets.”
The bylaws passed on Monday assigned various portions of that loan to specific municipal assets, including $1.4 million toward the cost of the Highway 26 West connecting link, $641,909 toward the cost of 4th and 5th Street bridges, $5.2 million toward the Hume Street widening and $850,000 toward the cost of LED streetlight conversion.
Amin says the most important part for the general public to understand is that the town is not taking on new debt through the agreement.
“We are not taking on new debt. It’s simply an accounting way to repay the existing debt through Collus Powerstream because of their ineligibility to assume that debt,” said Amin.
