Michael Fougere, the mayor of Regina, says the city's newly approved debt limit of $450 million is not excessive.
Fougere was asked about the new ceiling after the Saskatchewan Municipal Board said the higher limit, up from $350 million, was OK.
"We are not excessive in terms of debt," Fougere said Wednesday. "No one likes debt, there's no doubt about that. But having said that, we're building a community here and this is an investment in our future."
The city needed another $100 million added to its debt limit to account for a loan that is part of the funding for a new $278-million football stadium.
"We have a source of revenue to pay that off," Fougere stressed, referring to the additional $100 million in the debt limit.
A facility fee collected at Roughrider football games will go to the city, according to Brent Sjoberg, Regina's deputy city manager and CFO. The fee is $12 per ticket.
Sjoberg says a deal to provide stadium space to Sask Sport will also be used to pay down the loan. Sask Sport has committed to paying $2.5 million per year, for 30 years, to the city.
Sjoberg says those two sources of money — the facility fee and money from Sask Sport — should be enough to pay the interest and principal of the $100 million, over 30 years.
"The debt will essentially liquidate itself over time through this revenue stream," Sjoberg told council on April 8. "The combination of those two revenue streams is sufficient to pay both the principal and interest on this $100 million loan."
Sjoberg said the city did an analysis of tickets sales for the Riders and believes the facility fee should be reliable.
"Obviously there is always some risk based on ticket sales," Sjoberg added, "but it's not a significant risk, in this case."
In addition to money for the stadium, Regina's new debt limit would be used to borrow money for its work on the water utility. Regina also expects to borrow $20 million, within the next four years, to fix up the police station.
The most recent approval for the city's debt limit was made by a two-person panel of the Saskatchewan Municipal Board, consisting of Dianne Ford and Gordon Hubbard.