REGINA — With Regina city council set to begin its budget process, the discussion of mill rates is already front and centre.
City administration has requested council approve a 2.32 mill rate for the 2026 budget to help cover principal and interest payments associated with $115 million in long-term debt acquired from the Water Network Expansion (WNE) and Unfunded Development Charge (DC) Projects debt.
Council originally approved acquiring $85 million in debt for their WNE projects and $30 million in debt for underfunded DC projects in their 2025 budget.
The WNE projects aim to address the city’s future population size of 310,000 people by creating new water storage reservoirs, a new pumping station, and more.
Meanwhile, DC projects are ones which are experiencing a projected negative cash balance, requiring debt financing from the city. These projects include Arcola Avenue Intersection Improvements, Wastewater Capacity Upgrades South Trunk, and more.
There is a total of over $61 million in debt, which will be financed from around 20 projects.
As for where the debt will come from, RBC Capital Markets has agreed for the city to purchase the $115 million bullet debenture over 30 years.
However, in order to secure the funding, council must pass the water network expansion project and the unfunded development charge project sinking fund debenture bylaw.
Administration outlined that failing to pass the bylaw would “result in significant reputational damage amongst municipalities and investors.”
“Uncertainty [for investors] would result in severely limiting investor appetite going forward. Limited demand would then mean the city would be required to pay a higher credit premium to complete future transactions.”
If approved, the debenture will be issued on Sept. 10, 2025 and mature on Sept. 10, 2055.
The debenture will have a coupon rate of 4.95 per cent with interest payments of nearly $2.85 million to be made semiannually on March 10 and Sept 10.
City council will debate the topics on Sept. 3.
