(File photo/paNOW Staff)

By Dawson Thompson

Budget Increase

Prince Albert looks to increase debt limit to complete capital projects

Jul 21, 2021 | 1:00 PM

The City of Prince Albert is seeking councils approval to proceed with an application to the Saskatchewan Municipal Board to increase the approved debt limit by $10 million dollars to $75 million.

“The province monitors to make sure that cities are within their borrowing capabilities,” Cheryl Tkachuk, Director of Financial Services, told paNOW.

“Not every municipality has a debt limit established. What this does is anytime a municipality wants to borrow money, it has to be within the debt limit approved, or we would have to go to the Saskatchewan Municipal Board for every time we want to borrow if we don’t have a debt limit established. It provides us with more options.”

As of December 31, 2020, the city had a long term debt of $20,626,393 and also has a line of credit that is worth $12 million.

The debt has accumulated from the purchases of transit buses, improving the Cooke Municipal Golf Course irrigation system and reservoir upgrades.

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“If we are able to increase our debt limit, we could continue on with our budgeted projects,” Tkachuk said. “All this will do is it will help us to achieve those goals of going ahead with capital projects. It’s that one step that is required in order for us to fulfill those promises.”

The total for debt financed projects that were approved for the 2021 budget are approximately $39.2 million.

These projects include construction for the arena and aquatic recreation centre at $16 million and the raw water pump house at $12.8 million.

The long term debt, the line of credit, and the approved projects in the 2021 budget put the city over $71,816,113, a total of $6,816,113 million over the approved debt limit.

“We’ll need at least $7 million dollars where we would go over our debt limit if we did not increase it,” Tkachuk said. “What this does, it will give us more borrowing room instead of having to go to them with each loan.

“However, it doesn’t mean that we’re borrowing money. It just gives us more room to borrow.”

A more detailed report will be presented to council at the executive meeting in August. One of the questions that council had was a comparison to the debt limit in other Saskatchewan cities like Swift Current and Moose Jaw.

“We are currently gathering information so that when we go forward it is clear to the public that our debt limit is very minimal compared to other cities,” Tkachuk said.

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Dawson.thompson@pattisonmedia.com

On Twitter: @dawsonthompson8