COVID-19 uncertainty prompts PUC to increase borrowing capacity

In what's expected to be the first of many municipal financial adjustments to the COVID-19 crisis, city-owned PUC Services Inc. will seek permission next week to tweak its debt strategy.

Rob Brewer, PUC president and chief executive officer, will be at Monday's City Council meeting, asking for approval of a $30 million Infrastructure Ontario credit facility, as well as a $4.5 million line of credit.

Brewer will also seek permission for a $5.8 million drawdown (gradually accessed) from the Infrastructure Ontario facility.

He will stress that increasing PUC's borrowing capacity is a proactive measure only during what he terms "unprecedented times."

"We do not yet know what the impact of COVID-19 will be on our customers," Brewer says.

"In order to have the resources available to provide flexibility when and if needed, PUC is taking the initiative to think ahead and plan for the future." The increased capacity is considered necessary to cover any effects of COVID-19 and other capital needs.

The resolution to be presented to City Council on Monday calls for the utility to increase its cash reserves "given the turbulent times."

PUC has already extended the suspension of electricity disconnections until July 31 and committed to offer payment plans and extended credit terms to all residential and business customers.

Monday's City Council meeting will be closed to the public under emergency legislation passed by the Ontario government, allowing municipal councils and committees to meet electronically.

SooToday will livestream the proceedings starting at 4:30 p.m.