O-NET will be getting the cash it needs to complete its fibre optic network in town after council passed two bylaws on March 24 that would allow the company to borrow $8 million.
O-NET will be getting the cash it needs to complete its fibre optic network in town after council passed two bylaws on March 24 that would allow the company to borrow $8 million.
The first bylaw authorizes the town to borrow money from the Alberta Capital Finance Authority. The second would allow the town to lend that money to the Olds Institute for Community and Regional Development, which owns O-NET.
Both bylaws received second and third reading that evening.
"Well Your Worship, what can we say besides thank you and thank you for the trust and we’re going to do everything we can to make this a reality and keep Olds on the map. Stay tuned," said Joe Gustafson, chair of the institute’s technology committee, as he addressed the mayor and council.
At council’s policies and priorities meeting on Feb. 18, a presentation from the O-NET delegation stated that $5.38 million of the loan would go toward capital purchases and to cover operating shortfalls from 2014-15.
About $1.9 million would be spent to complete construction in O-NET’s last three service areas in town, council heard that day. The last $680,000 would be for contingency costs.
According to Norm McInnis, the town’s chief administrative officer, borrowing money and lending it to O-NET will leave the town with $4 million in debt limit space.
A debt limit is the maximum amount a municipality can borrow.
Council requested that the town apply to Alberta Municipal Affairs for an increase to its debt limit by $14 million to cover the $6-million loan given to O-NET in 2010, as well as this new loan.
That would give the town $18 million of debt limit space, McInnis said.
McInnis said he expects this to be the last time O-NET will ask to borrow money, adding the town believes the company’s business plan is sound.
"When you look at the business plan, there’s some pretty good confidence that this thing’s going to work and actually start generating some significant revenue for our community," he said.
The loan bylaws received first reading on Feb. 24. They had to be advertised for two weeks and then open for 60 days to petition from the public.
According to Olds mayor Judy Dahl, neither she nor council received feedback from citizens.
"We have got to the point where the conversations and the public engagement that council has had with administration and all the members with Olds Fibre Ltd. and Olds Institute must have satisfied the majority of their questions to date," Dahl said.
When the loan bylaws received first reading, an amendment was made that would put Garth Lucas, the town’s director of corporate services, on the Olds Fibre Ltd. board.
O-NET is the service provider and marketing brand for Olds Fibre Ltd.
Lucas will be reporting back to the town each Monday to make sure O-NET’s plan is on track, Dahl said.
Under a loan agreement with the Olds Institute, the town must approve of any changes to O-NET’s business plan or the scope of its project, McInnis said.
Breaching that agreement would result in the town collecting the loan security, $11 million of assets owned by the institute, he said.
"The second thing is … the technology committee themselves have come up with a set of key performance indicators so they will be reporting both to the technology committee and to the OI board on those KPIs," McInnis added.
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