The City of Lloydminster is looking to borrow the last portion of needed Cenovus Energy Hub funding following a pair of council motions.
Read more: Understanding the Cenovus Energy Hub
As the project progresses, the city continues to wait to hear back about nearly $7.4 million in funding from the Alberta Government.
Following the most recent budget from the provincial government, the city was left out of any potential funding. Their next option? Possibly borrow the remaining funding.
“Unfortunately, since December 2023, those grants were unsuccessful and the Government of Alberta, at this time, has declined to contribute to the project,” said Tracy Simpson, executive manager of community development services.
Grants to both the federal and Alberta governments were unsuccessful. Administration will continue to explore other funding options to reduce borrowing,
“The bylaw just puts in place the limit in which we can borrow. It doesn’t stipulate you have to borrow that full amount. So, we’d only borrow what’s required, and if we found other funding sources through continued work trying to seek funding from Alberta or other grants, we would reduce that borrowing,” said Simpson.
To date, according to Simpson, they’ve borrowed $10 million with the remainder expected to be borrowed this year.
Coun. Jason Whiting asked if it would be possible to see any scope reductions to save money at this stage.
“The project is fairly along now that any significant scope reduction would be costly and likely result in penalties related to some of the contracts we have,” said Simpson.
“We did discuss a lot of those scope reductions in 2023 with council and that, unfortunately, would have been the time to make some of those decisions.”
Administration also shed some light on the debt payments the city is making.
“Inclusive of this additional $7.4 million, the total debt payment would approximately $2.4 million a year, again, depending on the interest rate we secure,” said Adele Wakaruk, executive manager of corporate services.
With conversation around the table largely focused on the debt and need to borrow money, Coun. Michael Diachuk spoke to the impact the new arena will have.
“I think the studies and the numbers we’ve seen is (roughly) $1,000 a day per adult when they host events in the city. While people are seeing the costs around the Cenovus Energy Hub, what we often overlook is the impact it has positively on businesses in the community,” he said.
Council approved a pair of motions to start the process of amending the bylaw to borrow the additional $7,380,926.
Coun. Jim Taylor, however, was opposed to the motions to borrow additional funds.
First reading of the bylaw is expected to be given at the May 5 council meeting with the final two readings expected at the May 20 meeting.
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