Rocky View County (RVC) council approved renewing the County’s annual agreement with ATB Financial for a $5-million line of credit.
RVC Manager of Business Services Barry Woods told council on Jan. 14, the borrowing arrangement is accessed at times to provide cash flow for paying bills when invested funds may not have matured, grants have not been received or when payment obligations are exceptionally high.
“This is a revolving line of credit, and it is used in times when all our assets are tied up and all the issues are required to be paid on the operating side,” he said, adding there is a 30-day maximum to borrow money against.
In response to a question by Councillor Jerry Arshinoff, Woods said the line of credit is not used to pay interest on any existing debt. Woods told council the County collected about $91 million in taxes in 2013 and has a current long-term debt of about $62 million.
Woods said the line of credit is accessed infrequently, but according to a County report, “is an important aspect of the overall management of the County’s cash flow.”
Woods said in the last five years, the County has accessed its line of credit once.
“It was a matter of two days before our investments came in,” he said in an interview with the Rocky View Weekly, the event was in 2010 and the County used the full $5 million.
Councillor Lois Habberfield said because the maximum amount is $5 million, the County’s taxes are sufficient to be “able to cover that.”
“At times, we wouldn’t be using any of this line of credit. We are not borrowing it and sticking it in our bank account. It’s only when you need it, you access it,” she said.
Reeve Margaret Bahcheli brought up a concern that the wording in the agreement “is very corporate as opposed to governmental… and does not act in (the County’s) favour.” The agreement references the County as “the Corporation.”
Woods said when the Rocky View County renews its banking agreement this year, the terminology can be reviewed and potentially altered at that time.
