Georgian Bluffs will take out a 15-year debenture to pay for the biodigester it and Chatsworth are building together.
But the municipality remains optimistic the waste disposal system will be paid off in just over half that time.
Georgian Bluffs council unanimously agreed on Wednesday night to allow treasurer Holly Morrison to negotiate a 1.2-million dollar debenture with the Bank of Montreal.
A presentation to council said the township’s share of the 3.8-million dollar project will be just over 1 million.
Based on an interest rate of 2.5 per cent, Georgian Bluffs could pay back the debenture over 15 years at an annual cost of $84,540.
But it would be an open debenture and the municipality would be able to pay an additional 60 thousand dollars per year without penalty.
If that happens, the biodigester would be paid off in eight years.
And Georgian Bluffs is optimistic that the revenues from the biodigester will absolutely allow for that to happen.
Mayor Alan Barfoot says projected annual revenues of 534 thousand dollars, based on tipping fees and electricity that is generated and sold to the grid, have deliberately been low-balled.
Annual expenses of 212 thousand dollars probably won’t be that high.
The worst-case scenario as presented to council calls for an annual net revenue of 322 thousand dollars — representing 161 thousand for each municipality.
That would certainly allow for Georgian Bluffs to pay off the debenture at the faster rate of $144,540 per year.
Council was told that Chatsworth council approved a similar financing measure earlier on Wednesday.
The cost of the project has climbed from 2.5 million dollars, but Barfoot says that was not unexpected considering this is the first such waste disposal system in Ontario.
Part of the reason for the increased cost is the addition of a pasteurizer, which increases the number and variety of products that can be put in the biodigester – fats, oils and greases – and creates an entirely new revenue stream that hadn’t previously been considered.
Despite this addition, construction remains on schedule and Barfoot expects the system to be operational sometime in the early fall.
