Lloydminster council set the city’s debt limit at 75 per cent following a motion.
The item was presented to council for decision at the Oct. 27 council meeting. Previously, the policy stated debt could only be obtained from the Government of Alberta.
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“This one, just wanted to allow us to borrow from both provinces and align with the Lloydminster Charter,” said Ryan Hill, financial planning and analysis manager, City of Lloydminster.
The policy also sets out further debt limit restrictions.
“This is the policy under which the city shall further restrict the debt limit of the municipality to 75 per cent,” said Adele Wakaruk, executive manager, corporate services.
Coun. Jason Whiting asked if this was something unique to the Border City.
“I haven’t seen it in any other comparable policies,” said Wakaruk. “But, I’m sure there are other municipalities that likely take prudent measures to make sure they’re not borrowing beyond the legislated limit.”
Deputy Mayor Michael Diachuk says using the lower debt limit allows them to have more wiggle room.
“That 75 per cent threshold gives us a lot more latitude. We’re far below that 75 per cent, which allows us to do things in our capital plans, setting reserves aside and emergencies come up,” he said.
Diachuk explained if the debt gets too high, the organization is unable to make changes as they’ll just be paying off debt.
“What it does do, from my roles in the past running an organization, is that if your debt reaches a particular level, you really have no latitude in terms of trying to change how you do things,” said Diachuk.
“It costs money to make change within your organization. If you’re locked in, to the point where all you’re doing is paying bills, you’re really not doing much else beyond that.”
Council approved the debt manager for capital expenditures policy.
Read more: Lloydminster council passes borrowing bylaw
