The City of Lloydminster expanded its borrowing bylaw for the new Cenovus Energy Hub arena. The loan will cost the city more than $70 million to pay back.
Read more: Unsecured arena funding in question
The process is well underway as the Hub borrowing bylaw received first reading.
The bylaw looks to expand the maximum borrowing from the original $33 million up to $40,380,926.
The new motion will add $7,380,926 to the total borrowing.
As the city waits for further potential funding from the province of Alberta, borrowing from the bylaw has also been delayed.
“We are currently deferring as much borrowing as possible to the end of the project,” said Adele Wakaruk, executive manager of corporate services.
“Currently, we’ve already borrowed $10 million to make sure we are keeping pace with the construction costs. We don’t plan to borrow an additional $23 million until probably Q3 of Q4, 2025. Then we’ll look to borrow, if required, the additional, rounding up to $7.4 million until Q1 of 2026.”
The city continues to look at other avenues of funding.
“Of course, we’re going to try our best to explore all other funding opportunities and delay that borrowing as long as possible,” said Wakaruk.
City manager Dion Pollard said there are rules surrounding the borrowing and how to pay it off.
“There are rules around the borrowing. You can pay it out, but you need another borrowing item, whether it’s another municipality or our own municipality to take on that borrowing debenture you’ve got at that current rate,” said Pollard.
“It’s very unlikely someone would do that, unless the rate is more favourable than the one on the table at the time.”
Coun. Justin Vance asked for a breakdown of the loan term.
“We look to borrow this $40 million over 30 years. We’re drawing small chunks at a time at this point to make sure we’re securing the lowest interest rate possible,” said Wakaruk. “Slightly less than 2.4 million (a year), all inclusive.”
“The scary numbers are when you do the $2.5 or $2.8 million over 30 years and you’re getting numbers like $80 million or $70 million to what we’re getting of $40 million. I guess that’s just the cost of doing business. It’s the scary numbers that hurt,” said Vance.
The numbers can be terrifying, but they also put the total borrowing the city will incur to make the new arena a reality into perspective.
At $2.4 million a year over 30 years, the total payback comes to $72 million, almost double the borrowing through the bylaw.
Council voted to give first reading to the borrowing bylaw with Vance opposing the motion.
Read more: Lloyd looks to borrow more for Cenovus Energy Hub
The City should reduce the project scope instead of burdening tax payers.
Who starts building anything without having funding in place?
Field of Dreams?
The council is still ran like a fiddle by the city administrators.
They show up with little binders and they get what they want. No questions asked.
So the new amount borrowed is $7.38 million? The headline makes it sound like 70 million in newly borrowed money. The 70 million is over 30 years if no lump sum payments are made against the 40 million build cost for the city.
The council is still ran like a fiddle by the city administrators.
They show up with little binders and they get what they want. No questions asked.
Every mayor and counsel have to leave there mark on the city which becomes there undoing. Remember city hall and the extravagant new RCMP building which cost millions built on the the most expensive piece of property within the city. Now we have a new rink and playground for the few that can afford to use it or go to watch events. We just spent millions on a new huemungus new arena on the south end of town which cost millions and we are still paying for that one, when the next election comes around maybe look at your property tax you are paying and remember who put you in debt so deeply. We will be paying the last one off in just 30 more years. “HURAH”
What grinds my gears are these dumb little surveys.
“Do you want taxes to stay the same and lose police coverage”
“We can increase taxes or pickup your trash once a month”
But when it comes to recreational or frivelous luxuries, then it dosen’t matter “spend spend spend” and to hell with the taxpayer.
Like that 4million dollars they “needed” to work on golf carts. Why they need an overhead crane for? Look at all the mechanics in town with no overhead cranes. Maybe an 8×12′ trailer would be a better investment. Haul it to them.
I am discusted when I hear the debates they have. There is a little bit of fresh faces that sometimes stand up but its too little too late IMO
City of Lloydminster….. spend a ton of money but don’t fix the Infrastructure…. Many other things could have come before this abomination of wasted tax dollars.