Red Deer debt slips to $199.1 million
Debt has become a hot topic during this year’s municipal election campaign, raising questions on how much Red Deer owes.
A city press release, dated April 15, 2013, said the debt at the time was $206 million and the projected year-end debt was $241 million.
However, updated figures from Red Deer city manager Craig Curtis this week say that as of June 30 of this year, the city’s debt was $199.1 million.
“It’s slightly lower than it was in our financial statements at the end of last year when it was $206 million,” said Curtis, adding an updated projection will be a part of the 10-year capital budget that is presented in November.
While that projection hasn’t been completed yet, Curtis said the city’s debt as a percentage of its debt limit is projected to be lower than it was last year, when it was 46 per cent.
“I can tell you it will be lower than last year because our debt is not likely to be as high.”
That $199.1 million was the same number that mayoral candidate Cindy Jefferies mentioned when asked about the debt during the Tuesday forum hosted by Red Deer College.
Some candidates have cited the projection instead of the current debt when asked about it during the campaign.
Mayoral candidate Chad Mason referenced the projection during the Oct. 2 forum. Similarly David Helm, a Red Deer First council candidate, used the same forum to say the debt was a quarter of a billion dollars. A post on Mason’s website from Oct. 2 says the city’s debt is $258 million.
In a phone interview on Monday, Mason said he got the $258 million from an article posted on the Red Deer Express site, which in fact was a letter to the editor from Red Deer First candidate Calvin Goulet-Jones published on Jan. 16, 2013.
Dennis Trepanier, also a mayoral candidate, says on his website that the debt is at $241 million. He said he got the number from the city’s website. At the Tuesday forum, he also referred to the debt as a quarter of a billion dollars.
The outlier from the forum at the Golden Circle was Lloyd Johnson, a first-time candidate. During the forum, he said the city’s debt was at $284 million. However, he said in a phone interview this week that he misspoke and was referring to the city’s capital expenditures.
“My focus was on the capital expenditure forecast and that’s where my wording got wrong,” said Johnson, adding he should have said $241 million.
The city’s debt has only ever been attached to fund capital projects, since the municipalities are required to balance operating budgets. The difference between the projection and the actual debt the city is based on when certain debentures come out.
“Debt fluctuates depending on when we might actually take out a debenture,” said Curtis.
The largest projects have related to the water and sewer utilities and the expansion of the two plants. Sixty-eight per cent of the debt is supported through utility rates and 32 per cent is tax supported.
Dean Krecji, Red Deer chief financial officer, said the city’s debt service in 2012 was $22.6 million in principal and interest. When it does borrow for capital projects, that money comes from the Alberta Capital Finance Authority.