The debate over a pair of short-term debt bylaws will resume at the next regular council meeting on April 27.
Bylaws No. 11 and 12 of 2020 will be up for consideration. The first will allow the City to increase its operating line of credit from $12-million to $22-million. The second will allow it to borrow up to $10-million.
Those funds will be used to finance “the daily cash management activities of the City,” according to a notice sent out on Thursday. The $10-million loan must be repayable within 12 months. Interest rates are 1.7 per cent for the line of credit and three per cent for the short-term loan.
The public will not be allowed to attend the meeting due to social distancing requirements. Instead, residents have been asked to provide written submissions on the subject to the City Clerk by 4:45 p.m. on Tuesday, April 21.
While the provincial and federal governments have provided funding for businesses and residents hit hard by the COVID-19 pandemic, Mayor Greg Dionne said he doesn’t expect them to do the same for municipalities. That means the City will have to look at other ways to cover costs, and Dionne is confident a loan and line of credit will help them do that without causing long-term financial damage.
“Debt is not a bad thing, but you’ve got to manage it. We’re managing it, and that’s the key,” Dionne said in an interview on April 8. “As you know, every household in the country is managing debt. We have some of the highest debt ratio per capita (out of) all the countries, so we’re good an managing debt and that’s the key. If you can manage your debt and you manage it well, you can get out of it and I think we’re in a good position.”
City council first debated the two bylaws during a special council meeting on April 8. They approved a property tax motion during that session which allows residents and business owners to apply for a deferral. If approved, they would not have to pay those taxes until Sept. 30, instead of the original June 30 deadline.
The City still has more than $47-million in uncollected property taxes due in 2020. Administration says they’ll need additional cash to keep city services running if those funds can’t be collected until September.
“Deferring the property tax deadline … will cause a decrease in cash flow related to tax revenue typically received in June 2020,” reads a report written by Cheryl Tkachuk, financial manager for the City of Prince Albert. “In order for the City to maintain financial flexibility during this time, short-term borrowing options must be considered.”
The regular council meeting on April 27 will start at 5 p.m. at City Hall. For more information on submitting written submissions to council, visit www.citypa.ca/en/city-hall/speaking-to-council.aspx or call the city clerk’s office at 306-953-4305.
Council also has an executive committee meeting scheduled to start at 4 p.m. on April 20.