While St. Albert’s list of potential projects to fund through long-term debt is extensive — some $500 million in new projects from 2023 to 2050 — the city’s director of finance says not all of them need to be taken on.
What the city will have to do, however, is reexamine its current debt policy, and be strategic when it comes to taking on new debt, Diane McMordie, director of finance for St. Albert, said.
Back in May, McMordie gave a presentation to council looking at big-ticket items the city will have to consider borrowing for in coming years, and raising questions about the benefits of the city’s historical debt aversion.
McMordie told council she hopes the city can get into a more proportional rhythm of new debt coming on while old debt retires, referred to as debt laddering.
While McMordie argued St. Albert should develop a more sustainable debt strategy, she highlighted in an interview with The Gazette that no future scenario will see the city having to fund all $500-million worth of projects on its horizon.
“Not all of [the projects] will ever be funded,” McMordie said, noting some of the projects on the list are “nice to have projects” for the city.
“There’s definitely a lot more flexibility around whether you do them or don’t do them … depending on what the situation is.”
So, what are the projects on St. Albert’s horizon council will have to consider in the coming years?
Rec centre
By far the most expensive new capital project on the horizon is the rec centre to be located between Range Road 260 and Ray Gibbon Drive, slightly below Villeneuve Road.
Council has yet to finalize the details of the project, and for conceptual purposes it is currently broken up into four phases on the city’s debt project list, with each phase slotted in for $35 million.
During a June 13 committee meeting, members of council heard planning for the new rec site will centre in its most basic form around an aquatics facility, with additional options beyond that to be presented for council approval.
Administration anticipates potential scenarios for the rec site will be completed by the end of 2022.
St. Albert Trail widening
Construction to widen St. Albert Trail from a four-lane to a six-lane divided roadway has been ongoing since 2020.
However, while the previously approved borrowing bylaw for the total project was initially capped at $26 million, the first two phases have depleted that amount.
Phase one included the section north of Boudreau Road to north of Coal Mine Road, and phase two focuses on north of Coal Mine Road to north of Everitt Drive.
The next phase, phase three, will take the widening north of Everitt Drive North to north of Neil Ross Road, and according to the city’s website is anticipated for construction in 2023/24. Phase three will require a new borrowing bylaw to come before council for approval.
Downtown area projects
Two big-ticket items on the city’s capital-project wish-list relate to improvements in downtown St. Albert.
The first, Millennium Park, is currently evaluated at $11.6 million. Conceptual design for the park was completed in 2019, and included a community building, trails, and a four-season water feature/ice surface.
During an Apr. 6 committee meeting, council discussed how the plans for the park — such as its size, which Coun. Mike Killick said seems small — might need to be revisited before the project is funded.
Additionally, there are several unfunded projects that comprise the city’s Downtown Area Redevelopment Plan (DARP), which total $27 million.
The majority of these projects include street improvements to Perron, Grandin, St. Anne, St. Thomas, and Tache Street. These improvements include realigning and extending some streets, as well as adding pedestrian improvements.
Solar farm
Three different options for the city’s solar farm project were originally scheduled to come before council in July, but were deferred as administration needed more time for both project design and financial analysis.
The project’s $33.75 million borrowing bylaw passed a first reading in the summer of 2021, but was held back from full approval after council heard from the public that more information should be gathered on the project.
Administration last estimated that the project will come forward for council’s consideration in the fall.
Off-site levy projects
The remainder of projects up for debt consideration are off-site levy projects — large infrastructure such as sewer pipes and water lines that then connect to the smaller lines within developments.
Developers are responsible for paying for all off-site infrastructure, McMordie explained, with the city acting as a banker to manage how much they owe, and who owes what. Several developers typically benefit from these off-site levy projects, meaning that the cost is ultimately divided up into small fractions.
However, McMordie noted, you can’t build a fraction of a pipe.
If one developer is ready to move forward, but others aren’t, the responsibility of paying the initial upfront costs to kick-start development can fall on the city’s shoulders.
Though the city will be reimbursed later, how far into the future that payout will come means the city might have to shoulder the costs for decades at a time.
Currently, there are 24 off-site levy projects on the city’s list of priorities for upcoming development, each ranging from $6 to $23 million in cost.
The city is already looking to front-end a utilities project in the north east to ensure development isn’t stalled, and homes in Oakmont and Erin Ridge aren’t flooded from overburdened storm and sanitary infrastructure.
The projects will run along the east side of Erin Ridge and Oakmont. Once the design is complete and the projects are tendered, an additional funding request will come before council for construction, currently estimated at $32 million.
McMordie said the city will have to be strategic in deciding which of the other projects on the list it will look to front-end through borrowing.
“Not all of them will ever be funded,” she said, noting sometimes projects can drop off the list, for example because a new study the city has done shows the need can be served in a different way.
Debt strategy
Currently, the city is looking to review its debt policies, and examine other municipalities' practices through a regional scan.
One of St. Albert’s policies up for a second look is its internal debt limit, which caps debt at 15 per cent below the limit set for municipalities by the Municipal Government Act (MGA), and caps tax-supported debt at 50 per cent of this internal debt limit.
Tax-supported debt is debt that is repaid through the use of tax-levy revenues, as opposed to other means, such as reimbursement through an off-site levy program.
McMordie said controls such as limits are important, but they need to have sound reasoning behind them.
“What are we trying to achieve?” McMordie asked. “Does that limit achieve that goal, or is there a better way to achieve the same goal? If it’s not achieving the goal, what other measure could be put in place?”
These are all questions the city and council will have to consider when reviewing the debt policy.
McMordie said she hopes in a year’s time the city will have a brand-new debt policy that details a process around borrowing — such as a specific time of the year where council can discuss the projects that are coming up for consideration, and refine criteria for whether or not they should be prioritized.
Debt considerations must be long term, but the four-year time-period that an elected council sits can sometimes limit planning for a far-off future, McMordie said. A robust debt policy can help counteract that.
“When it comes to debt … decisions you make today have a very, very long-lasting impact,” McMordie said.
