© Times-Herald photo by Lisa Goudy
Brian Acker, director of financial services, talks about the city's debt limit at the July 14, 2014 council meeting.
If approved by the Saskatchewan Municipal Board, the City of Moose Jaw will have a $32 million-increase in its debt limit.
At Monday’s meeting, councillors passed a motion to request an established debt limit of $95 million for the city. The current debt limit for the city is $63 million as established on Feb. 25, 2009. The debt limit was established for a three-year period ending in December 2011 and another three-year period that ends on Dec. 31 of this year.
“I wanted to stress that the $95 million is not how much money we’re necessarily going to borrow. It’s simply a limit,” said Brian Acker, director of financial services. “We do need to request a renewal on that debt limit.”
Presently, the city has a total of $35 million in outstanding debt. The highest borrowing is for the multiplex facilities at 5.03 per cent or $18.28 million.
That is followed by sanitary sewer utility borrowing at 4.64 per cent or $11.56 million, multiplex interim borrowing at 4.8 per cent or $4.41 million and West Heath phase three at 2.11 per cent or $741,000.
In future years, there are several large projects that will likely require additional financing, including $25 million for the cast iron water replacement program, $15 million for the 2015 Buffalo Pound pipeline and $5.5 million in 2014 hospital funding.
Combined with the current debt, the future total is approximately $80 million. The new requested amount of $95 million is also based on a contingency for any issues that might come up.
“Part of the reason for a contingency in terms of emergent issues is it’s a process to go through to get your debt limit approved,” said Acker. “It isn’t something you get approved in a couple of weeks. It’s normally at minimum a three to four month process. So to have some additional limit is certainly wise.”
For comparison, Regina’s debt limit is $450 million, Saskatoon’s is $414 million, Swift Current’s is $75 million, Yorkton’s is $42 million and Prince Albert’s is $40 million.
Coun. Brian Swanson said he’d like to know how Moose Jaw’s debt compares to other cities.
“The debt limits of the other cities, I think it would be more interesting to see what the actual debts of the other cities are,” he said.
Acker said that information would be presented with financial statements in August.
Swanson added borrowing the $25 million for the cast iron water replacement program isn’t enough.
“Even if you borrow $25 million, the city will still be several tens of millions of dollars short for something that has to be proceeding and should have started 15 years ago,” he said. “Five years ago we had no debt and we’ve gone from on top of the heap to being serious borrowers.”
Coun. Dawn Luhning added that two-thirds of the borrowing is for the multiplex.
“We’re not even borrowing money to provide the need services that the city needs,” she said. “The load of debt the City of Moose Jaw is carrying is for want and that’s where I have a problem for this kind of thing.”
Follow Lisa Goudy on Twitter @lisagoudy.