The town will creep closer to its debt limit with the proposed borrowing of almost $11 million to complete infrastructure for the future high school and Horse Creek Sports Park.
Last night, town council gave first reading to the borrowing bylaw for the project that will return for further consideration on Apr. 28 after being publicly circulated.
Town Chief Financial Officer Alvin Allim says the $10,830,000 debenture would be amortized over 20 years with repayment of $858,500 annually based upon the 4.94 per cent interest rate currently charged by the province. Indications are that the rate could drop before the loan terms are finalized.
Within 15 days from the date of the last publication of the notice, electors can petition council for a vote on the borrowing bylaw.
Should the borrowing be approved, CFO Allim said the town's total debt will be about $83.8 million, 71 per cent of the town's imposed debt limit. Another $33.6 million would remain available.
The town's total debt servicing for 2025 is projected to be $5.9 million.
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It's the second major borrowing bylaw to receive first reading by council this month.
On Mar. 10, council approved first reading of a $17,890,000 borrowing bylaw for the completion of the James Walker Trail. Unlike the Horse Creek project, these funds are expected to be eventually recouped through off-site levies. This debenture bylaw is scheduled to return to council for a final decision on Apr. 14.
Allim told council that with other forecasted borrowing, the town will exceed its limit by $1,553,467 in 2027 and by nearly $50 million in 2030.
Alberta Government regulations allow for about $30 million more in debt in 2025 than what the town has imposed. Taking into account borrowing for 2025 capital projects, the town would still have $66 million available before it hits the provincial cap and $30,356,288 available should anticipated 2027 projects proceed.
Even at the higher debt limit, the town's projected capital project costs are expected to exceed the provincial debt limit by more than $15 million in 2030. At that point, the town would be paying $9,638,020 for debt servicing, well within the $28 million limit set by the province.
That financial picture is subject to projects proceeding and an anticipated update to the town's off-site levies bylaw, expected soon.