File photo of City Hall. (Alison Sandstrom/paNOW Staff)

By Alison Sandstrom

Cost of COVID-19

Council contends with COVID-19 cash crunch

May 4, 2020 | 4:00 PM

Prince Albert is grappling with the financial cost of the pandemic, moving ahead with a variety of short and long-term borrowing options, and calling on the federal and provincial governments to provide much-needed cash injections to municipalities.

“We’re in dire straits, here and in cities all over the country,” Coun. Don Cody said during the latest city council meeting on April 27. “It is absolutely necessary that we get money from senior levels of government or else we are not going to make it and the tax-payers will have to pay.”

Mayor Greg Dionne echoed Cody’s concerns that cities had tightened their belts while continuing to provide services, but they wouldn’t be able to do it for much longer without help from the feds or the province.

“We’re going to continue to shout and yell as loud as we can at both levels of government until they step up to the plate like they did with every other business [that they] helped out, we’re no different,” Dionne said.

The cost of property tax deferral

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Meanwhile, pending final approval, at the same council meeting, the city’s politicians all but signed off on borrowing $20 million to get Prince Albert through the summer with the deferral of a portion of property taxes.

The bridge financing will be done through a combination of a line of credit and a short-term loan, both to be paid back in October after the extended property tax deadline. The total interest cost is estimated to be $176,250.

“We usually get $34 million in property tax [in June] and we’ve waived the vast majority of that until the end of September,” Dionne said. “That’s why we need short-term borrowing so we can get through that time.”

Potential long-term debt increase on the horizon

Finally, so the city can proceed with all its planned capital projects this year, council agreed with administration’s recommendation to ask the Saskatchewan Municipal Board to increase Prince Albert’s debt limit from $55 million to $65 million.

Director of Financial Services Cheryl Tkachuk told council the city won’t necessarily need to use all of that, but they want to have the flexibility.

“We do have a couple projects that we could potentially be debt borrowing for, so we want to make sure have enough room in the debt limit,” she said.

When asked to give a rough estimate, Tkachuk said the city lost a couple hundred thousand dollars from mid-March to mid-April, largely due to the decrease in use of transit, the landfill and the airport.

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alison.sandstrom@jpbg.ca

On Twitter: @alisandstrom