City councillors decided Monday night to examine financing options to pay off a $10.4-million balance still owing on the Benson Centre.
The $32-million facility has become a hockey hot bed since opening in 2011.
City acting CAO Stephen Alexander and finance manager Maureen Adams had recommended that council take $420,000 from the interest created by the $25-million Progress Fund to pay down a small part of the existing Benson Centre balance.
The remaining $10 million would be borrowed and paid off via financing. But Monday night council voiced support for borrowing to pay off the whole balance and leave the $400,000 in the Progress Fund interest bracket.
"The current interest rate environment is very attractive for long-term borrowing and the city is in a very solid financial position to enter into a long-term financing agreement," read a report to city council.
City bean counters will begin contacting banks to secure a loan that would be paid back over 20 or 25 years. Adams will report back to council in November on the progress the city has made in discussing borrowing options with banks.
Interest rate terms the city seeks are different, depending on the term agreed to on the loan. Terms of five, 10 and 15 years bring with them interest rates of 2.12, 2.73 and 3.13 respectively.
Currently, the Progress Fund earns a little more than $750,000 in interest annually. At Sept. 30, the balance in the Progress Fund consists of the principal amount of $25 million and $525,122 from investment income.
"Given the current low interest rate environment there would likely be an opportunity that the investment return on the Progress Fund could improve several years from now," says the city hall report tabled Monday night.
The Progress Fund was created following the sale of Cornwall Electric. At the time, the city touted itself as being debt-free without the need for a loan.
