REGINA — The City of Regina’s outstanding debt is expected to hit $350 million by the end of this year.
This debt is largely attributable to the stadium and wastewater treatment plant projects, which made up almost 90 per cent of the city’s borrowing last year. Both projects are to be paid off by 2044.
Regina Exhibition Association Limited, the municipal corporation that runs Evraz Place, was also given approval to jack up its debt limit to $11 million this year, but it has not issued any debt to date.
That shies in comparison to the city’s total debt limit: $450 million. The city doesn’t expect to breach that limit until at least 2020, though. Director of finance June Schultz clarified that’s how far into the future financial projections stretch; it doesn’t mean the city will go more than $450 million into debt thereafter.
But debt will be a consistent theme in Regina as the city grows. Chief financial officer Ed Archer noted at Tuesday’s Finance and Administration Committee, where the annual report on debt was being discussed, that as Regina’s population climbs, it will be difficult to sustain municipal services without using debt — unless residents are OK with property tax hikes.
The city is currently developing a long range financial plan to help in this area, too.
Long-term planning is a key element in credit ratings, on which the city has consistently ranked high recently. A strong credit rating means the city can get good interest rates, access more debt, and have better negotiating power with lenders.
Despite Regina’s top-student report card, two of the city’s four debt ratio indicators were double or triple their targets in 2014 and 2016, and one was triple its target in 2014-16. The ratios are calculated by comparing debt to other financial indicators.
Schultz said while the ratios are “not something we’re ignoring,” them being above target is OK because the jumps derive from balloon payments in those years, which were “planned debt.”
She said the targets are a way to understand the city’s debt and how the municipality can manage services at the same time.
The above-target ratios are not expected to affect the city’s credit rating, the report says.
At the meeting, councillors examining the report had few concerns.
Coun. Bob Hawkins was curious what the city’s global interest rate is, something staff will provide in time for the end-of-month council meeting.
And Coun. Shawn Fraser wondered what projects made up the debt, other than the stadium and wastewater treatment plant. He’ll get his answer on Oct. 26 as well.