Prince Albert City Council gave final approval to a Short Term Debt Bylaw that will allow the City to borrow an additional $18 million for the new Indoor Arena and Aquatics Centre.
Council voted 5-2 in favour of the bylaw during third reading at a Special Council Meeting on Wednesday afternoon. The loan will help cover cash flow fluctuations while the City waits to receive funding and revenue over the next five years.
Mayor Greg Dionne said fundraising and taxation generated by The Yard Entertainment District will cover the annual loan payments, which would be around $4.1 million for an interest rate of five per cent. Administration has recommended a fixed interest rate that does not exceed 5.35 per cent.
“It’s good because it’s at the final point now,” Dionne said in an interview following Wednesday’s vote. “We can move on with our fundraising and now all we have to wait for is the opening, which I hope will be late January or February of next year.”
The City already has already taken out loans of $30 million and $16 million to fund the new recreation centre. Those loans are expected to be repaid by 2058 and 2057 respectively.
According to a report included in the agenda package for Wednesday’s meeting, the City has an estimated $85.6 million in outstanding debt as of the end of 2023.
The City’s authorized debt limit is $120 million approved by the Saskatchewan Municipal Board.
The Municipal Financing Corporation of Saskatchewan financed both the $30 million and $16 million loans, and administration has recommended they finance the $18 million loan as well.
Dionne said he’s confident residents will support the $18 million loan because of how quickly the area around the arena has been developed. The City owns 25 acres at the 80 acre site, with the rest hosting an assortment of restaurants, hotels, and other businesses.
Couns. Charlene Miller and Tony Head both voted against the bylaw. Couns. Terra Lennox-Zepp and Darren Solomon were not present for the vote.
In an interview afterward, Miller said her constituents aren’t happy with how many loans the City has taken out on this project, and she’s voting in line with their concerns.
“I said no to the $30 million (and) I’ve said no, obviously, to another $18 million,” Miller said. “I just think it’s too much. People are telling me that it’s too much to be spending and I’m the one who is getting the phone calls, so I’m just doing as my people expect me to do.”
The City began discussions about borrowing an additional $18 million in February. In a statement released before the February meeting, City Manager Sherry Person said the city anticipated covering some construction costs with fundraising, but failed to consider many fundraising commitments would be paid over several years instead of up front in one lump sum.
The City expects fundraising dollars to come in over the next 5-10 years. Both Person and Dionne said the loan would help the ensure the project was completed on schedule and within budget.
