Yellowknife's Northlands Trailer Park owners to start paying back sewer loan

The final phase of the water and sewer saga at Yellowknife's Northlands Trailer Park is about to begin as residents start paying back the city the cost of repairs Feb. 1.

The owners of the 258 properties in Yellowknife Condo Corporation No. 8 will pay the city $283.27 a month through a local improvement charge (LIC) to pay back the $15.7 million the city borrowed to replace the trailer park's crumbling water and sewer system, plus 3.3 per cent interest.

"It grew into an issue that could never be dealt with by the condo board. It was just too big," said condo board president Tamlin Gilbert.

"It's a massive relief for the board and the members as a whole to know that the responsibility for maintaining the infrastructure has been passed to the city." 

The trailer park was founded in the 1970s and became a condominium corporation in 1990. Under a condo corporation, the owners are responsible for maintenance and upkeep of infrastructure on the property, but Northlands' condo fees were set so low, there was no reserve fund to deal with infrastructure repair.  

In 2004, when it became clear the decades-old water and sewer infrastructure needed replacing and the condo corporation didn't have the money to do the work, it partnered with the city to try and find federal or territorial government financing for the project.

When they came up empty-handed, city council voted in 2012 to borrow the money on behalf of Northlands and have the owners pay it back over 25 years.

Bylaw vote

Water and sewer replacement work started in 2013, and is now mostly complete.

At a city council meeting on Monday, councillors voted to adopt the bylaw that would allow the city to start collecting the local improvement charge and the city will take control of the infrastructure, making sure it is properly maintained.

The local improvement fee will be paid in addition to the condo fees of $55 a month that owners pay to the condo corporation.

Along with responsibility for maintaining the water and sewer system, the condo corporation also transferred hundreds of thousands of dollars to the city coffers.

"Now that the city has replaced the infrastructure, we don't need that large a reserve so the only way we could use the capital reserve fund we had was to transfer it to the city before they took ownership of the infrastructure," said Gilbert.

"So we transferred $800,000 specifically to pay down the LIC."

Gilbert said enough money was held back in reserve to cover the corporation's capital costs for the next 40 years.

Mortgage insurance

In 2010 the Canadian Mortgage and Housing Corporation stopped insuring mortgages in Northlands until the water and sewer lines were replaced.

That meant anyone looking to buy in the park would have to have at least a 25 per cent down payment.

In November, the CMHC told the city it would start offering mortgage insurance again once the local improvement charge was being collected.

In an email, a spokesperson for the housing corporation said it is waiting on confirmation from the city that the loan is being paid back.