The city’s deal for the Catalyst Paper Corp. lagoon has taken another step towards closing.
Port Alberni city councillors authorized city staff to apply for a $5.75 million loan from the province’s Municipal Finance Authority to purchase the lagoon.
The lagoon is located on the Somass Estuary, across the river from the mill, and sits on land owned by the Port Alberni Port Authority.
Catalyst ceased using its lagoon after they upgraded the Alberni mill with a sludge treatment facility. The facility will enable the city to meet new stringent federal and provincial effluent standards.
The loan would be paid out over two years: $5 million in the first year and $750,000 in the second year. The loan amortization rate would be over 30 years to give the city flexibility to pay it back earlier if it could.
Council’s approval is one of several steps that need to be taken for the loan to be approved. The process is expected to be finished in February.
“This is a legislative process that sets out very specific requirements that have to be met before the loan can be approved,” City Finance Manager Cathy Rothwell said.
In August, the city announced that it reached an agreement-in-principle with Catalyst that included the tentative purchase of the lagoon and key road for a waterfront industrial truck route.
The city has already applied for federal grant monies to purchase equipment to renovate the lagoon. The loan will pay for the acquisition of land and equipment.
The city must upgrade and expand its sewage treatment capacity to remain in compliance with federal and provincial regulations and to handle population growth.
The process will move through a 30 day quashing period before being re-submitted to the province for a provincial inspector’s approval. Afterward, it must pass a third reading in council before the package is sent to MFA for final approval.