By Thia James

City eyes debt ceiling bump to $70M

Nov 4, 2014 | 5:49 AM

The City of Prince Albert is looking to raise its debt ceiling to $70 million dollars, and Mayor Greg Dionne wants this to be viewed in a positive light.

The City’s current debt limit sits at $40 million, and the last time the Saskatchewan Municipal Board (SMB) allowed the City to raise its debt ceiling was in 2008. Then, the ceiling went up by $5 million to $40 million, where it will remain after the end of this year unless the SMB approves the $30 million increase.

Such limits put a cap on the total amount of debt cities can take on, as assistant director of the department of finance, Brian Parschauer wrote in a report about the proposed increase.

“Should the City ever require additional capital financing for infrastructure as large as something like a second bridge, it would be advantageous to have the debt limit sufficiently high to avoid the delays that are common when requesting debt limit changes.”

Moose Jaw, a city of a comparable size to Prince Albert, applied for a debt limit increase this past summer, looking to raise it from $63 million to $95 million, with $35 million of outstanding debt. In Swift Current, with a population of about 17,500, the debt limit is $75 million and in North Battleford with a population of about 19,200, it’s $45 million.

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In the documents for the proposed budget, the City estimates it will have about $12.7 million of external, long-term debt. External borrowing as of Dec. 31, 2013 stood at $14.405 million.

Just before the executive committee approved the recommendation to allow city administration to request a debt limit increase, Mayor Greg Dionne encouraged the media to carry the “positive” message forward about the request.

“We’re not borrowing $70 million to build the mayor a new house or anything. You know, that it’s a positive thing that the City needs to do,” he said.

Coun. Don Cody said that it’s important for the public to know that the City doesn’t intend to borrow any money right now.

“But the public will not understand that. They will be all over us about ‘you raised it because you have something … under the radar here or something’s coming.

“So, I think the communications really have to be here clearly spelled out that this is just a thing that has to be done because of the fact that the [Saskatchewan] Municipal Board needs a new thing, a new renewal and once you’re doing it, you might as well go for where you are in case.”

In a report about the proposed debt ceiling increase, city administration wrote that in the past it wasn’t uncommon for the debt limit to be two-times the budgeted taxable revenues. For Prince Albert in 2014, that would be $34.117 million, and double that would be about $68 million.

Council is expected to grant city administration approval to ask the Saskatchewan Municipal Board to increase Prince Albert’s debt limit at next Monday’s meeting.

After that it could be six weeks before the board agrees to the increased debt limit.

tjames@panow.com

On Twitter: @thiajames