City approves internal $2 million loan at a rate of 5.10 per cent to fund Carbide Dock Easterday Project with $1,090,000 from Augusta Hursley Seal Trust, $910,000 from Governor Chase Osborn Trust
A proposal to approve a $2 million internal loan at a rate of 5.10 per cent to help fill the gap needed to fund the $36.8 million Carbide Dock Easterday Project passed at a Sault Ste. Marie City Commission meeting on Monday, June 5.
City Manager Brian Chapman said $1,090,000 would be pulled from the Augusta Hursley Seal Trust and $910,000 from Governor Chase Osborn Trust.
“These funds would be utilized to assist in funding the gap for the Carbide Dock Easterday Project,” he explained. “The city has taken out loans against the two trust funds in the past. Given the current market, this is a better rate for the two trust funds versus investing it somewhere else.”
Mayor Don Gerrie, U.S. Department of Agriculture (USDA) Area Director, supported Chapman’s proposal.
“Sitting on the Seal Trust and Osborn Trust, there is money available to invest,” Gerrie said. “The investment market is getting better, but it’s not great right now. This would certainly be a good opportunity for the city — win-win — We get to invest our own funds, and not pay as high of a rate. Certainly, if we were to borrow, we would owe a lot of money to attorneys and the bond counsel. As I understand it, if we are awarded some of these grants we could pay them back… not penalizing ourselves with an early payback.”
According to the city website, the Carbide Dock Easterday project fell short when bids came in higher than projected due to increased post-COVID material and labor costs. Thus far, the city has received grant funds in the amount of $25.9 million, and $472,100 in city match. Awards for up to 10 grants to total $10.4 million have yet to be received, but look “promising.”
A motion to approve an internal loan equalling $2 million at a rate of 5.10% to the City Capital Projects Fund for the Carbide Dock Easterday Project with $1,090,000 pulled from the Augusta Hursley Seal Trust and $910,000 from Governor Chase Osborn Trust was put forth by City Commissioner Shane Miller, seconded by Commissioner Jodi Bosbous-Rath, and unanimously carried.
The city has two construction seasons to complete the Carbide Dock and Easterday Avenue Project.
For more information on the Carbide Dock and Easterday Avenue Projects, view the Sault Ste Marie City website and agenda by clicking here. Read more about Carbide Dock and Easterday Project background and bids at Soo Leader, here.