In less than two minutes Monday evening, council debated a staff recommendation and unanimously passed a motion to “authorize temporary borrowing" as requested in a staff memo and draft by-law.
Reporting mechanism not specified
In her absence, the deputy treasurer's report was delivered at Monday's council meeting by Interim CAO Rob deBortoli.
Describing the reasons for the recommendation, deBortoli said, “The city's cash flow requirements vary from month to month, as we have to deal with paying off our expenditures or collecting revenues. And the various revenues that we do receive are usually from taxation, water billing, and receiving government grants."
The recommendation authorizes staff to borrow up to “50 per cent of the total estimated revenues of the municipality as set out in the budget adopted for the year” until September 30, reducing to “25 per cent of the total estimated revenues” in the remainder of the year.
The revenues described total approximately $25 million annually; however, the by-law caps the temporary borrowing at $5 million - or the amount determined by formula, whichever is less.
The staff report did not specify a future method of public reporting to council. Council did not ask for one.
Cost of borrowing
The report informed, "There is no direct impact on the budget as a result of this by-law. To the extent that funds are borrowed during 2025, there will be an interest cost during the period of said borrowings."
Council did not inquire where the interest cost for the borrowing would be taken from if funds are borrowed.
The 2025 operations budget was set at the Ad Hoc Budget Committee meeting, February 19, when it was approved unanimously with all members of council present.
Will the authority to borrow without council oversight be in the hands of new staff?
The by-law authorizes the CAO and the Treasurer to borrow. It is expected these positions will soon be filled with new staff.
The city has been without a treasurer since last summer. A new treasurer was recently announced and is expected to start on April 14.
Information received on February 28, 2025, in response to a Freedom of Information request, informs that during a closed session of council on April 15, 2024, the CAO contracted service was extended two years from an end date of "December 31, 2024" to "December 31, 2026."
Two months ago, a memo from the Interim CAO dated January 9 requested council approve $39,300 for an executive search to locate a new CAO.
'We are not taking out a loan right now' - 'We're simply establishing a safeguard'
Council’s questions focused on the routine nature of the request. Deputy Mayor Charles Flintoff asked the first question in the form of a comment.
“Just a comment that might turn into a question, Mr. deBortoli. Just so the public out there, so they totally - hopefully they all understand it.”
“We are not taking out a loan right now. We're giving ourselves the capability, if we ever need it, that we would use it. I'm involved in another group, since I've been on council, and we've done the exact same thing. So, am I right in saying that, Mr. deBortoli?”
deBortoli: “That's correct, Councillor Flintoff.”
“We're simply establishing a safeguard in the event that we find ourselves in a cash flow position, where we would require extra money from the borrowing,” deBortoli said.
How routine is it for Elliot Lake?
Couns. Merrill Seidel inquired, “I believe this is something we do every year on a yearly basis. Like, have a by-law in place in case we do need to borrow. Am I correct in that?”
deBortoli: “You are correct. It has been done in the past on an annual basis. I don't believe it was done last year, no.”
ElliotLakeToday reviewed historical council meeting minutes. The most recent temporary borrowing by-law passed was 18-61 on November 26, 2018. The city clerk confirmed it was the most recent.
‘Just good financial management’ - Interim CAO
“I'm not sure the rationale as to why it wasn't completed in 2024, but we'll definitely, we're definitely positioning ourselves in the event. And this is just good financial management,” deBortoli said.
'How often implemented?' - 'I don't recall it being utilized.'
Mayor Andrew Wannan: “Okay, one final question from me. Historically, how often has this been implemented?”
deBortoli: “To my recollection, when I was around for the first period, I don't ever recall it being utilized.”
None of the council members asked why the recommendation is coming forward now or what reporting the council will receive.
On Tuesday, ElliotLakeToday reached out to Couns. Norman Mann, chair of the Finance and Administration Standing Committee, and asked what reporting the council and citizens will receive. A reply has not been received by the time of publication.
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