Lacombe city council approved $7.2 million in spending last night for the capital costs of extending water and sewer services to the county.

That figure represents the city’s share of a $15-million project that also includes intersection improvements at Highway 12 and 76 Street.

Reserves and offsite levies would help pay for the city’s contribution but $6.6 million will need to be borrowed, said Matthew Goudy, director of operations and planning.

Council gave first reading to the borrowing bylaw that night.

Water and sewer services would be extended to county lands just outside the Highway 2 and 12 intersection, an area that both city and county call a Joint Economic Area.

There is an incentive for the City of Lacombe to offer municipal services to that area.

The inter-municipal development plan -- a cooperative growth plan both parties have signed -- states that once the Joint Economic Area is hooked up to water and sewer services, the county shares half the taxes raised from its development.

"That is quite favourable for the community," said Coun. Peter Bouwsema. "It will make it quicker to sell, quicker to develop."

Estimates of capital costs for water and sewer services total $11.6 million. The county would pay half of that.

As one of the water mains serving the county lies beneath Fairway Drive, council had an option that would involve reconstructing the street, including installing sidewalks. However, council will consider that project during 2018 capital budget deliberations.

Councillors said the timing is right for the project because of the city’s strong relationship with the county.

“They are willing to contribute a fair amount of money in order to make this project happen. If that was not possible and we did not have the same kind of relationship, we wouldn’t be able to move forward on this project on our own without a major additional borrowing,” Bouwsema said.

Under the borrowing bylaw, the city’s debt would be paid over 30 years at a variable rate of 3.3 per cent.

The city’s debt limit would increase to 79 per cent of its limit under the law.

An extra $139,000 would be spent on debt servicing through tax-funded operations each year.