Rising debt load on minds of Regina City Council

A rising debt load, and whether the City of Regina will have to raise the debt limit again, has been the hot issue at the city council this past week.

The issue came up during a discussion of whether to approve debt financing of between $92 to $119 million for the central library renewal project. The financing for the project was approved at a special meeting on July 9. However, some councillors thought the decision was premature and wanted to wait to find out how it might impact the debt situation for other projects.

The issue of debt came up again at the executive committee on July 10, when the main item on the agenda was considering the Water Network Expansion debt financing of $100 million.

Council members were told by the administration the previous day’s decision in favour of debt financing for the library would impact the debt limit. The city would need to go back to the Saskatchewan Municipal Board for an increase that would accommodate both the new downtown library project as well as the indoor aquatic centre project.

The issue of how to deal with the multitude of projects needing debt financing has been a concern at City Hall for a while. Back in June, the council received a report from administration that listed $722 million in projects needing debt financing but only $299 million in debt room to accommodate all of them.

Regina’s current debt limit is $660 million. That was set by the Saskatchewan Municipal Board last December after the city had applied for an increase from $450 million. But it was lower than what the city had initially applied for, which was $780 million.

The Water Network Expansion, a major project that includes a new pumping station and reservoirs, was already approved by the council. The debt financing fits within the new $660 million debt limit that is now in effect.

But the prospect of Regina raising the debt limit again, and carrying even more of a debt load to fund even more projects, is likely to raise eyebrows among many residents.

In speaking to reporters on Wednesday, Mayor Sandra Masters says residents should be even more concerned about what happens if projects are put off and issues aren’t dealt with.

“I think the lack of planning for this over the… last number of years, like a long time, and failing to deal with the fact that you have to replace infrastructure, has kicked the cans down the road,” said Masters.

Masters made it known she wanted to avoid even worse infrastructure issues later on. She wanted to avoid situations like a 60- or 70-year-old storm drainage pipe that collapses.

“We’ve got serious about the water utility, and that’s in place, but I don’t think we’ve ever gotten serious and in fact have left out certain buildings,” said Masters. “And the problem is we reach crisis point. And I think right now we are in a position — let’s avoid the crisis point,” said Masters.

For those concerned about property taxes and the mill rate going up to pay for infrastructure replacement, Mayor Masters said “I think the more significant thing that everybody should be concerned about — is hundreds of millions of dollars in infrastructure deficit.”

She pointed to the Calgary water main break as an example, “That’s what you don’t want to happen.”

Regarding the potential debt limit application, Mayor Masters said it would come back to the council in either August or September for approval of making an application again. After that, an application would go to the Saskatchewan Municipal Board for a decision. The indication from Mayor Masters is the request is likely to be for $780 million which was their original application last year.

As for the Water Network Expansion debt financing, that will go back to the council for final approval.