As the city gets closer to borrowing $6.7 million, one city councillor is suggesting officials look at the possibility of issuing bonds.

Coun. Doug Graham said someone brought the idea forward to him.

"His comment was very simple: 'I'd love to lend the city at six per cent or 6.09 per cent, and does a municipality have the ability to float a bond issue basically where we would sell bonds to the public at a mutually agreed interest rate, shall we say, that would be beneficial both to the people that purchase the bonds and to the city as well?'" Graham said Monday evening.

Acknowledging the territory's Municipal Act would have to be changed for the city to be able to sell bonds, Graham suggested the city could start taking a look at the possibility as a way of raising cash for major projects.

While it's obviously too late to look at bonds as a way of raising money for the new firehall, it could be something that may work in the future, he said.

"There's a possibility it could be a win/win for everyone involved," Graham said.

He spoke between council passing first and second readings of the bylaw to borrow the funding for the $10.7-million structure that will be built at the top of Two Mile Hill where the current fire hall is.

Deemed a public safety building, the 2,732-square-metre structure will be a public service building also housing bylaw offices, a meeting room for emergency measures officials and a room built specifically for computer equipment housing much of the city's data.

The proposed borrowing bylaw would see the city pay back the loan from the Royal Bank over 20 years.

While the final interest rate will be set at the signing of the agreement, current indications peg it at 6.09 per cent, making the annual payment more than $580,000.

While that part of the deal would take effect after construction, the initial loan would see the city draw the money at three points during construction at interest-only payments at prime, currently at three per cent.

Council will have to pass third reading of the loans bylaw before it takes effect.