Emily Plihal
Local Journalism
Initiative Reporter

Town of Peace River administration sought a decision from council to repay a higher-interest loan debt at its regular council meeting Oct. 15.

“Council chose to pay off the long-term debts on four items amounting to about $900,000,” says Mayor Elaine Manzer.

“The interest rates on these items were higher than currently available, the burden on the operating budget was reduced, and it also increases the Town’s available borrowing limit, if it is needed.”

Council had held various forms of long-term debt and capital lease obligations, with the debenture debt ranging in rates from 1.416 per cent to 5.096 per cent.

The maturity of the loans ranged from 2026-50.

Manzer explains there was a loan repayable to Vision Credit Union at Prime plus 1.5 per cent, with prime sitting currently at 6.45 per cent. So, the total interest rate was 7.95 percent on their loan that had a balance of $291,640.13.

“Current interest rates are lower than was being paid on these items,” she notes.

“Repayment will help the operating budget as less interest will be paid,” she adds.

In addition to the loan, council was also holding three leases that were only maturing in 2029 or 2030. A Compact Track Loader lease with a balance of $114,676.10, Cat Wheel Loader $369,189.05 and Hydraulic Excavator $107,486.79 were also debt considered for repayment.

“The long-term debt is analyzed as part of the budget process, to see whether paying it off early is advantageous to the Town’s overall budgets,” explains Manzer.

Council decided to pay off all of the four debts immediately to reduce the burden on the operating budget.