Hwy upgrade project cost up by $1.1 mil, borrowing remains the same

The cost of the Hwy. 1A upgrade project has risen $1.1 million and has hit the $11.4 million mark.

The increase is attributed to higher material and labour costs for the second phase of construction.

The increase hasn't impacted the amount being borrowed. An additional $880,000 will be taken from the town's off-site levy reserve and $220,000 from the Canada Community-Building Fund grant.

The additional spending isn't expected to impact any other town capital projects because the bulk of the funds will be recovered from off-site levies.

On Mar. 14, town council gave final approval to the borrowing of $8,240,000. It received its first reading on Feb. 14, and no objections were received from the public before returning for the second and third reading.

The funds are expected to be borrowed this fall with payments beginning in 2023. The town will be repaying the debenture over 20 years at an estimated $771,714 annually. It will leave the town at 49 per cent of its borrowing limit.

The interest rate and repayment schedule haven't been finalized.  The current 20-year interest rate is 3.64 per cent. The bylaw allows for the interest rate to reach as high as seven per cent.

The project is scheduled to be completed by the end of the 2022 construction season.

Contractors will begin earthworks in preparation for geotechnical drilling to determine resources required to construct the 4th Ave. retaining wall.