HUMBOLDT - City Council approved the application to the Saskatchewan Municipal Board to increase the city’s debt limit from $13 million, up to $28 million.
City Manager Joe Day said the city requires this increase to facilitate the borrowing necessary for the wastewater treatment facility as well as maintain borrowing capacity for other municipal needs that will likely occur in the near future.
Debt limits for Saskatchewan cities are established by the Saskatchewan Municipal Board, and can be increased, decreased or exceeded upon request. The City of Humboldt currently has an established debt limit of $ 15 million. In Day’s report to council, it said as of Dec. 31, 2023, the city’s long-term outstanding debt is approximately $ 2.54 million, however the city also guarantees the repayment of two loans which factor against the available limit and the city’s ability to borrow. In 2018, the city guaranteed a Humboldt and District Fire Protection Association with a balance outstanding at $32,375. In 2022, the city guaranteed a Humboldt Golf Club Inc. loan which had an outstanding balance of approximately $227,288 at 2023 year-end. The city’s available debt limit as of Dec. 31, 2023, is approximately $12.2 million.
The report went on to say, “The city is anticipating an upcoming loan for the construction of the new Wastewater Treatment System, and the additional required upgrades to Lift Stations 1 and 4. The estimated total cost of the upgrades is $40 million, of which nearly $25 million will be covered by the federal and provincial government through the Investing in Canada Infrastructure Plan (ICIP). Through the end of 2023, approximately $1.7 million had been spent on the project and already funded through reserve contributions, leaving the city to fund approximately $13.3 million to complete the project."
Within the report: “With anticipated growth in Humboldt’s future, the city may be required to invest further in other infrastructure capital for this growth. Some of those expenditures may be offset from revenue collected from off-site levies, but the delay in collecting those levies could necessitate that the city seek additional loans in the interim.
"The city’s current “operational” debt limit is set at $15 million. The wastewater treatment upgrade represents such a significant capital project that it justifies an increase to the debt limit related to the approximately $13 million of borrowing that it will require.”
City administration recommended that the City of Humboldt request that the Saskatchewan Municipal Board approve an increase of the current debt limit of $13 million, to bring the total debt limit to $28 million.
Day said that the City of Humboldt may have to incur extensive capital expenditures to further facilitate growth. Increasing the debt limit for the borrowing required by the wastewater treatment plant will allow the city the ability to take on more debt if the city is in a position of needing to.
