The City of North Battleford is seeking to raise its debt limit by $10 million.
The current debt limit, set in 2010, is $45 million. On Monday, council voted in favour of increasing the debt limit to $55 million.
As part of the resolution, council authorized administration to prepare the paperwork to be submitted to Saskatchewan Municipal Board to seek their approval. Once the SMB gives its stamp of approval the new debt limit will be in place.
The reason for the debt limit increase, according to city officials, is the city may need to borrow for major projects in the near future, and there is little room under its current limit.
“As we kind of get into the master plan, we’ve identified we’re going to need some additional money here in the not too distant future,” said Director of Finance Steve Brown.
The indication is administration wants to be proactive.
In particular, the city has several major projects coming up for water, sewer and capital upgrades. The city’s debt runs around $4 million below the current $45 million debt limit, which is not enough to cover all of those.
One project that has been on the books for a while, but has yet to go ahead, is enhancing the sewer trunk force main for flood mitigation. The city applied two years ago to Canada Builds for federal funding for that project, at an estimated cost of $15 million.
Councillor Greg Lightfoot pointed to other long term projects identified in the budget two years ago, including water treatment as well as Civic Centre replacement.
“Being ahead of the game is a good idea,” said Lightfoot, because it “does take time to get this approved by the province and by the municipal board, to make sure that we’re eligible to qualify for this.”
Mayor Ryan Bater said raising the debt limit also allows the city to get ahead of the game with asset management planningx.
Raising the debt limit is not a new discussion at City Hall. It came up during 2017 budget deliberations, when then-City Manager Jim Puffalt pointed to the sewer force main project, downtown redevelopment and the long-delayed City Hall renovations as projects that couldn’t be put off.
“We have to do something,” said Puffalt. He added if they were going to raise the debt limit, it was better to do it one time because it was “not something the City should do lightly.”
If ultimately approved by the SMB, its does not mean the city will use $55 million for debt right away. It does provide them with flexibility to use it for major projects, according to administration. If the city were to undertake debt borrowing for any project, public notice would be required and it would have come back to council.
It appears council is expecting an earful about the debt limit increase.
“I think this is something we’ll all hear a lot of feedback on,” acknowledged Councillor Kent Lindgren.
Lindgren wanted to see administration be proactive about going out to the community and engaging with people on the issue, pointing to successful community engagement efforts done recently by the Planning and Development Department.
“I’m wondering if administration has thought about that at all, going out to the community and hearing from them about why we are doing this and really explaining things. It’s one thing to hear it in a council meeting, it’s another to actually speak with the community outside of council.”
Brown agreed, saying what they want to do was go out with more information that will allow people to “understand the broader picture.” It is still in the discussion phase.
The next step is for the city to prepare the package to be submitted to the Saskatchewan Municipal Board for approval of the debt limit increase. The city also has to earmark how the debt will be paid for in its application.
That process is expected to take place over the next four to six weeks. The finance director added the city does not need to go to the Saskatchewan Municipal Board every time it wants a debt approved; they just have to approve the threshold.
