What is the construction cost of this facility and how much is the City planning to borrow for this facility?
Bid prices received for the construction were 35% above the pre-tender estimate for the facility with the total project budget coming in at total cost of $113.8 million. A revised funding plan for the facility has been approved which accounts for the rising costs due to inflationary pressures.
Total borrowing for the new facility is $46 million.
Did City Council consider not proceeding with the project given the rise in costs?
Yes, consideration was given to postponing the construction of the facility, however, City Council ultimately decided to proceed with the project given the following:
- the costs of construction only continues to rise which means any future construction will be even more;
- it would have put the $44 million in grant funding at risk,
- without the facility, further development would have been put at risk delaying future property taxation for the City and additional revenue for local businesses that will benefit from visitors that spend while attending the facility for tournaments and family activities; and
- residents would have to continue to rely on aging facilities for swimming and hockey programming (current facilities are 40-50 years old).
What is the repayment timeline for the borrowing?
The repayment schedule for the $46 million is 35 years. The taxation revenue generated from the Yard Development and the Civic Facilities Reserve will provide the necessary revenues for the annual interest and principle payments
How much additional revenue is expected from the Yard District?
The Yard District has a number of lots sold and development is underway. The taxation revenue generated from a property varies depending on the characteristics of the property. The following are examples of the municipal share of taxation revenue that could be generated each year from the types of business that are expected to be located in the area:
- Hotel: $230,000
- Car Dealership: $180,000
- Fast Food Restaurant: $50,000
- Strip Mall: $90,000
What is the City's current debt?
As of December 31, 2021, Prince Albert's debt was $21 million with a number of projects set to be paid off in the next few years. The City's approved debt limit in 2022 (the amount Prince Albert is pre-approved to borrow by the Ministry of Government Relations) is $120 million. Prince Albert's debt changes year to year as new projects are undertaken and past projects are paid off.
We publish a detailed listing of debt and the projects associated with that debt each year in our Annual Report.
The below table shows the City's debt compared to the current approved debt limit. For full details, see page 48-50 the 2023 Annual Report
How does the City of Prince Albert's debt limit compare to other cities?
With the increase to the City's debt limit to $120,000,000, the City of Prince Albert will be ranked #6 for debt limit per Capita when compared to 12 other Saskatchewan municipalities.
The City has said taxes will not go up to fund this facility, how can that be?
The revised funding plan continues to include no increase in property taxes to fund the land purchase, capital construction or debt servicing of the new facility. This is achieved through the following measures:
- Reducing the build costs by $7 million by modifying non-functional elements;
- Increasing borrowing by $30 million for a total borrowing of $46 million;
- Securing $24 million in external dollars through provincial and federal funding and fundraising initiatives; and
- Annual financing payments through the Civic Facilities Reserve and targeting property tax revenues from the Yard Development.
The taxation revenue generated from the Yard Development will provide the necessary revenues to cover the increase in annual interest and principle payments for borrowing the additional $30 million.
