Prince Albert City Council voted 6-3 in favour of borrowing $18 million as part of a plan to raise money for the Aquatic and Arenas Recreation Project, plus a new 4,500 seat WHL arena.
Mayor Greg Dionne said they expect plenty of donors to come forward and support the project, but most donors spread their donation over a multi-year period. Because the City rarely receives large donations as one lump sum, Dionne said, it’s necessary to borrow $18 million to cover costs today.
“If we get all the money upfront, we’d be in a (better) position,” Dionne told council. “That’s why this loan is only for five years, not like the rest of the loan for 30. This loan is only for five years to help us raise the money to finish paying off these projects, so that’s why I support it and for that amount, if the fundraising group comes through and raises the $50 million as they mentioned, the amount that we’re paying then is pretty cheap.”
The City originally anticipated borrowing $16 million for the project, but council later voted in favour of a $30 million loan. In 2024, the City of Prince Albert will pay $1.8 million in loan interest.
Dionne said he’s confident this form of financing will work because it’s how the City built the E.A. Rawlinson Centre and the indoor soccer centre at the Alfred Jenkins Field House.
Couns. Terra Lennox-Zepp and Charlene Miller were the most vocal councillors who voted against the project. Lennox-Zepp said paying $1.8 million in interest is already hitting the city hard, and increasing that amount would be poor financial management.
“That’s not a piece of lumber in the ground. That’s not an hour of labour,” Lennox-Zepp told council. “That’s just the interest we’re currently paying for one year only. It would be financially irresponsible of us as a city to incur a further $18 million loan on this project.”
Lennox-Zepp told council the City has already committed $4 million for architecture work on the 4,500 seat event centre. She said borrowing anther $18 million will leave the city with little wiggle room should an emergency hit.
“We have absolutely no financial capacity, no plan, to pay for and to build that 4,500 seat event centre,” she said. “(It’s) a major concern here. It would absolutely be financially irresponsible of us to incur more millions onto this debt, and we have no capacity to pay for it. It is obvious that we would put a hold on this project until we are in a position where we are able to pay for it.”
Dionne responded that he wasn’t concerned about emergency funding because the City has access to a $12 million overdraft.
Coun. Don Cody made the motion to borrow $18 million. Cody said the loan was “just good business” and argued the projects were a necessity.
“Bridge financing is done all the time,” he told council. “Let’s face it, when you are getting large donations—maybe $10 million, $5 million, or whatever have you—you don’t expect that they’re going to pay the whole thing in one year.”
Cody added that he was “disturbed” by comments that the City should put the project on hold. If the community doesn’t build a new event centre, Cody argued, the City may lose the Prince Albert Raiders. He also came out swinging against councillors who, in his opinion, were portraying the project in a negative light.
“We continuously talk about this and make it look as though this is a real bad project, and the public listens to some councillors, albeit they shouldn’t,” Cody told council. “Some of the facts aren’t there, and some of the facts that they try and espouse are wrong, and we need to straighten those things out from time to time.”
Couns. Darren Solomon and Dennis Ogrodnick also spoke in support of the $18 million loan. Ogrodnick told council it would be financially irresponsible to put the project on hold now. Solomon expressed disappointment that the City needed to borrow another $18, but said it’s not an unusual practice when the City is launching a fundraising campaign.
Solomon added that if council stopped the project now, the entertainment district would become the new La Colle Falls.
The $18 million loan must be paid off within five years. Administration needs to draft a short-term debt bylaw for council before the City can officially take out the loan.