Lloydminster’s debt is expected to surpass $100 million by the end of 2026, while the City’s reserves could fall by more than $30 million as funding is directed toward major infrastructure projects.
A second-quarter financial update presented to City Council shows outstanding debt could reach approximately $102.5 million by Dec. 31 if all approved borrowing proceeds. At the same time, reserves are projected to decline from about $76 million as of June 30 to roughly $45.5 million by year-end if all planned projects are completed and all approved reserve draws are used.
Despite the increase in borrowing and the anticipated reduction in reserves, the City remains well below its legislated debt limits. Lloydminster’s projected debt would represent about 54 per cent of its borrowing capacity, while annual debt-servicing costs are expected to total about $6.7 million, significantly below the legislated limit of $31.3 million.
The higher debt levels are largely tied to major construction projects already underway.
Earlier this year, the City took out a $30.4-million loan for the Cenovus Energy Hub project and a final $3.2-million draw related to the wastewater treatment plant. Administration noted the City temporarily relied on its own cash resources to cover some construction expenses before securing long-term financing.
More borrowing
Council heard about $19.6 million in potential future borrowing has already been incorporated into long-term projections. However, additional debt requirements could emerge as Lloydminster develops its new 10-year capital plan.
Administration identified future water-treatment infrastructure as one example of a project that could require borrowing once longer-term capital priorities are finalized.
While debt levels are expected to rise, City officials emphasized that reserves remain in a healthy position. As of June 30, Lloydminster reported approximately $100.5 million in liquid assets available to support operations and capital needs.
Reserves for approved projects
The projected decline in reserves reflects money that has already been committed to approved projects. Actual reserve balances could end up higher if projects are delayed, carried over into future years or completed under budget.
Much of the City’s capital program remains in the construction phase.
As of mid-year, Lloydminster had spent about $6 million, or nine per cent, of its $67-million capital budget. Of the 139 projects included in the program, 34 were complete, 88 were underway and 17 had not yet started.
Projects delayed
A $590,000 intersection improvement project involving traffic lights on the city’s north end has been pushed to 2027 because of delays in Saskatchewan grant funding. Meanwhile, two airport projects connected to runway-lighting technology and ground-support equipment remain on hold pending confirmation of scheduled air service.
The financial update also showed the City in a strong cash position through the first six months of the year.
Revenue totalled approximately $89.4 million, representing 74 per cent of the annual budget, while expenditures reached about $53.3 million, or 44 per cent of the yearly budget.
That resulted in a mid-year surplus of roughly $36 million. Administration noted the surplus is temporary and will be used to fund municipal operations and capital expenditures through the remainder of the year.
