Lloydminster debt projected to top $100M as major infrastructure spending continues

Executive Manager Adèle Wakaruk said the city had temporarily used its own cash to cover construction costs before securing long-term financing at a lower interest rate.

“We worked on a strategy to make use of our own working capital, and waited until the interest rates for long-term debt were a little bit lower, just to make sure that we were optimizing not only our cash flow but optimizing the interest rates and securing a lower rate,” Walker said.

The city’s borrowing could change further as longer-term infrastructure needs to become clearer.

Coun. Justin Vance questioned why projections show debt declining in future years when additional capital needs are expected.

Wakaruk said about $19.6 million in potential additional borrowing already identified by the city is included in the projections. She said the city takes a conservative approach by accounting for approved commitments when considering future budgets.

“We don’t want to overcommit ourselves when we’re looking to budget [2027] or on the longer-term landscape,” Wakaruk said.

Administration added that Lloydminster is working on a 10-year capital plan that could identify further projects requiring debt. The water treatment plant was cited as one example that could require future borrowing.

Once the plan is approved, administration said those potential borrowing needs could be reflected in future debt projections.

The city’s reserves are also expected to decline as money previously set aside is used for approved projects.

Lloydminster had about $76 million in reserves as of June 30. Administration projects that could fall to about $45.5 million by year-end if all budgeted projects are completed and all approved reserve draws occur.

The actual year-end balance could be higher if projects carry over into another year or come in under budget.

“If it’s marked as complete and the entire budget hasn’t been spent, that does mean that there’s going to be a little bit of budget remaining,” Wakaruk said. “We don’t actually withdraw those funds from the reserve, and they stay in the reserve.”

Administration said the city’s reserves were adequately funded as of June 30, with about $100.5 million in liquid assets.

Much of Lloydminster’s 2026 capital program also remains ahead.

About $6 million, or nine per cent, of the city’s $67-million capital budget had been spent through June 30. Of 139 projects, 34 were complete, 88 were in progress and 17 had not started.

Some projects have been affected by factors outside the city’s immediate control.

A $590,000 intersection improvement project involving lights on the city’s north end is being pushed to 2027 because of a delay in grant funding from the Saskatchewan government.

Two airport projects involving a runway-lighting computer and ground-crew equipment are tied to scheduled air service. Administration said the city had anticipated a carrier in 2026, but the projects will not proceed without confirmation of one.

Despite the planned borrowing and reserve spending, administration reported Lloydminster remained in a favourable financial position at the end of the second quarter.

Revenue totalled about $89.4 million, or 74 per cent of the annual budget, while expenditures were about $53.3 million, or 44 per cent.

That left a roughly $36-million mid-year surplus, which administration said is temporary and will be used to fund city operations through the remainder of the year.

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Kenneth.Cheung@pattisonmedia.com

by Kenneth Cheung

Lloydminster debt projected to top $100M as major infrastructure spending continues

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