GTH digs into debt to pay City of Regina $3M for services

The Global Transportation Hub Authority (GTHA) is taking on more debt, this time in order to pay the City of Regina for the services it uses.

"They can't keep up," said the Saskatchewan NDP's Cathy Sproule. "This shows that the GTH is not sustainable financially."

The GTHA agreed to pay the city $3.3million for the government-owned inland port'sconnection to Regina's water, sewer and roads from when it first opened it 2009,according to a news release.

"Debt financing has been secured through our financial institution to make the payment," a GTH spokesperson wrote in a recent email to CBC.

'More debt for you,' says NDP

"More debt for you, more debt for me," said Sproule.

A city spokesperson confirmed it received the payment on Wednesday.

For the currentfiscal year, the GTH was budgeted to have $35 million in debt.

However, at the government's mid-year update, presented in November 2018, that figure was $40 million, which included the $3.3 millionpayment to the city.

The mid-year report notesthe GTH experienced a revenue decrease of $6.4 million because of not making land sales, which has been a persistent issue for the government.

In an email statement sent toCBC on Thursday, Don Morgan, the minister responsible for the GTHA, said financing for paying the city the money it's owned for water, sewer and roads was approved in the fall of 2017.

Debt only option for payment

"In the absenceof additional land sales, this is the only option at this time for the GTH."

A GTHA spokesperson also echoed this sentiment, saying they would have preferred to use land sale revenue and are looking for business development opportunities in orderto turn the GTHA's finances from red to black.

Agreement long overdue, says councillor

A city spokesperson said the initialpayment from the GTHA covers its existing access to water, sewer and transportation services and the impact on city infrastructure.

"Should additional clients move into the GTH and connect to our system, additional payments are required under the agreement to compensate for the access to our systems to the agreed upon amounts," a spokesperson wrote in an email.

The long-awaited payment comes now that the GTH and city have finalized a servicing agreement.

Since 2010,the two sides have been hammering out adeal for the GTH topay the city for using its water, wastewater and transportationservices.

They reached a deal in December 2017. It was officially signed one year later in December 2018.

Ward 3 Coun. Andrew Stevens, who previouslysaid the city was at risk of being shortchanged millionsof dollars by the GTH, saidafinalized deal is long overdue.

He acknowledged that it has been a difficult file for city officials, but said it should not have taken almost 10 years to finalize.

$23 million to build water and sewer at the GTH

The cost of building water and sewer infrastructure at the GTH totalled $23 million, according to a June2017 briefing note prepared by Diana Hawryluk, executive director of city planning and development,and Shanie Leugner, manager of urban planning.

Obtained by CBC through access-to-information, the documentshows that between 2008 and 2010,the city spent $23 million to design and build water and sewer services at the GTH.

The city said it only spent $4.2 million of its own money, which came from its utility fund, while the rest of the cash came from provincial and federal grants "that was directed toproject to cover remaining costs," a spokesperson said.

City can scrap deal if GTH is sold

In a recent sit-down interview with CBC, Regina mayor Michael Fougerecalled the agreement with the GTHAfair for taxpayers.

A city spokesperson added that,"the agreement reflects a full-cost recovery methodology for the city going forward and to offset the impact the GTH will have on our infrastructure."

One of the provisions in the dealallows the city to stop providing services at the agreed-upon rates in the case that the GTH is sold or transferred into private hands.

Last year,Morgansaid the government needs to wash its hands of the inland port, with Premier Scott Moesharing that view.

Acity spokesperson told CBC, the agreement in placeensures the city is"protected" in the event of an ownership change, but "the city will deal with the particulars at that time."

According to theGTH,that process of divestment is ongoing.

"The intention is to provide current and prospective clients with assurance they will have safe, reliable water, wastewater collection and road infrastructure no matter who manages/owns/governs the GTH inland port in the future," a spokesperson wrote.

In the meantime, Sproule believes now that its relationship with the city is formalized, the GTHA couldamass more debt in order to keep up with the bills.

"It's just a bad news story for everybody," she said.