The City of Flin Flon has opened a line of credit for up to $1 million to help cover bills before they are paid by Hudbay’s municipal grant.
Coun. Colleen McKee, chair of the Finance Committee, stressed that the city remains on budget and that the line of credit relates to a “timing issue.”
Expanding on that, Chief Administrative Officer Mark Kolt said “one of the big factors” for the city are “large, lump sum” grant payments from Hudbay that cover about a third of the municipal budget.
“In periods leading up to those lump sum payments, we still have to pay the other bills,” Kolt said. “Especially when there’s a lot of construction going on, those bills can be pretty elevated.”
Requirements
Council’s motion to open the line of credit stated that its purpose would be “to assist with cash-flow requirements during the summer construction season.”
McKee said the city “had some issues with cash flow” last summer and the line of credit “enables us to be able to carry on with business without any kind of interruption.”
In carrying the motion unanimously at its inaugural meeting last week, council chose to take out the line of credit with RBC Royal Bank.
Rather than paying property taxes, Hudbay contributes an annual grant to the city and the Flin Flon School Division.
The amount of the grant is determined through a complex formula. In 2014 the grant totalled $5.75 million.
