TAMRMS#: B06
12.2
REQUEST FOR DECISION
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Bylaw 13/2026 - NE Borrowing Bylaw (1st Reading)
Presented by: Stanley Chan, Manager of Financial Operations and Reporting, Department
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RECOMMENDED MOTION(S)
recommendation
That Bylaw 13/2026, being a borrowing bylaw for Northeast Servicing, be read a first time.
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SUMMARY
The Northeast Servicing project was approved by Council on April 21, 2026, and will complete the construction (Phase 2) of new wastewater, water, and storm servicing that will support and enable development in the northeast growth basin.
The cost of the project was estimated and approved at $74,054,000. The borrowing bylaw is recommended for $88,250,000, which includes a 25% borrowing buffer. The intent is to fund this project through borrowing with the Alberta Treasury.
ALIGNMENT TO COUNCIL DIRECTION OR MANDATORY STATUTORY PROVISION
On April 21, 2026 Council passed the following motions:
CM-26-005
1. That project charter, ENGS-089 (Formerly WASWT-021) - Northeast Servicing Projects is approved in the amount of $74.1 M to be financed as follows:
1) $3.5 M from the Off-Site Levy Water Reserve
2) $28.1 M from the Federal Build Communities Strong Fund (BCSF) and,
3) $42.5 M through debt financing through Debt Financing, with 93% of the annual debt servicing funded from the Off-Site Levy Recovery Fund and 7% funded through taxes.
AND
2. That the first reading of the borrowing bylaw is brought before council by May 5, 2026.
3. That Council add “Northeast Servicing Funding” as an Advocacy Priority to Council’s 2026-27 Council Advocacy Priorities, to ensure completion of a funding agreement with all orders of government to secure $28.1 million for this project.
BACKGROUND AND DISCUSSION
The Northeast Servicing Project will bring forward the full suite of utility services (wastewater, water, and storm) to support the northeast development area. The Northeast Servicing Project will enable growth to continue within the northeast area including the existing partially built neighbourhoods (Erin Ridge North and Jensen Lakes) while also unlocking new growth areas, such as the Northeast Area Structure Plan. This project charter provides a permanent solution for utility servicing which is being constructed to support a 25+ year servicing area. The Northeast Servicing Project
will allow the City to revert the system from relying on interim servicing solutions around
wastewater and stormwater.
The City has received initial communication regarding the BCSF grant and continues advocacy with all levels of government to secure this funding.
The borrowing bylaw establishes a higher borrowing authority than the approved debt funding to manage funding uncertainty related to anticipated Build Communities Strong Fund (BCSF) grant receipts and to provide a prudent buffer for potential project changes (costs/scope) during project delivery. While Council has approved a maximum of $42.5 million in debt funding based on the current funding plan, the borrowing bylaw provides flexibility should grant funding not be received or should project scope/costs differ from current plans/designs.
The borrowing bylaw before Council today is intentionally set at $88,250,000 which was calculated as follows:
$74.1 million total project cost
- $3.5 million from the Off-Site Levy Water Reserve
$70.6 million in grant and debt funding
+ $17.7 million (25% buffer of $70.6M)
$88.3 million borrowing bylaw amount
This approach ensures that, in the unlikely event the grant funding is not received, the borrowing bylaw would not need to be amended; however, a separate Council motion would still be required to amend the project funding source or authorize any increase in debt beyond the approved $42.5 million limit.
STAKEHOLDER COMMUNICATIONS OR ENGAGEMENT
The borrowing bylaw will be advertised in accordance with provisions detailed in the Municipal Government Act (MGA) as well as Council Policy C-CAO-22 Borrowing Bylaw Advertising.
IMPACTS OF RECOMMENDATION(S)
Financial:
The City will be looking to borrow the funds from the Alberta Treasury Board up to a 20-year term. The actual interest rate will be based on current posted rates at the time of borrowing and advancement of funds and the term will also be selected at that time.
The City is responsible for 100% of the project of which 93% of the cost is offsite leviable and 7% is non-offsite leviable. The debt servicing of the offsite leviable portion will be funded from the off-site levy recovery fund and the non-offsite leviable portion will be funded from taxes. Based on the assumption that a 20 year term will be chosen, that the current posted rate remains the same, and the cash flow needs of the project are in line with the approved capital charter, the annual tax impact for debt servicing is expected to be $124,548 in 2028 and $124,528 in 2029
Provincial legislation requires municipalities to calculate a debt limit and a service on debt limit and to stay within those limits. In addition to the MGA regulations, the City of St. Albert Council Policy C-FS-03 - Debt Management imposes further restrictions on the use of debt financing. Policy restriction stipulates that the City will stay within 85% of the provincial limits overall. The new levels of debt contemplated for the City against these various limits, presented in the attachment titled Debt and Tax Impacts, demonstrates that the additional proposed debt for the Northeast Servicing is within MGA and City limits.
Compliance & Legal:
Section 254 of the MGA states that “No municipality may acquire, remove, or start the construction or improvement of a capital property that is to be financed in whole or in part through a borrowing unless the borrowing bylaw that authorizes the borrowing is passed.”
In accordance with MGA subsection 251(3), a borrowing bylaw must be advertised, unless the term is five years or less (section 257), then advertising is not required. Therefore, Bylaw 13/2026 must be advertised, with time allowed for a petition before the bylaw is presented for second and third reading.
Council Policy C-CAO-22 Borrowing Bylaw Advertising further stipulates that an initial advertisement of the bylaw must take place within 10 days after first reading (the “Policy initial advertisement stipulation”) and that the two statutorily mandated advertisements will be delayed such that electors are afforded a full 60 days to present a petition if
desired.
Assuming a petition is not received, in accordance with Council Policy C-CAO-22, the planned timelines for advertisement and second and third reading of the Borrowing Bylaw Advertising are presented in the attachment to this report entitled “Borrowing Bylaw Timelines.” If a petition is not received, it is expected that Bylaw 13/2026 will be presented for second and third reading on July 14, 2026.
Program or Service:
If the borrowing bylaw is not passed, the City will be unable to secure the financing required to support the project. An alternate funding source would need to be identified, or the project would need to be cancelled or postponed.
Organizational:
If the borrowing bylaw is not approved, Project Management resources will be reassigned to other funded projects.
ALIGNMENT TO PRIORITIES IN COUNCIL’S STRATEGIC PLAN
Initiative aligned with Strategic Plan:
Long-Term Debt Strategy
ALIGNMENT TO LEVELS OF SERVICE DELIVERY
B.4.2.d Investment and Development Readiness
Reducing barriers to investment or development in St. Albert by taking actions to address any current gaps such as infrastructure, servicing capacity, land availability, etc.
D.2.1 Off-Site Levy Program
Support growth and development by administering City's off-site levy program for essential infrastructure needed.
IMPACTS OF ALTERNATIVES CONSIDERED
If Council does not wish to support the recommendation, the following alternatives could be considered:
ALTERNATIVE 1:
Choose an alternate level of debt and identify sources for any potential funding shortfall
Financial:
Reducing the level of debt in the borrowing bylaw could result in insufficient funds available to complete the project and may require a second borrowing bylaw.
Compliance & Legal:
None at this time
Program or Service:
None at this time
Organizational:
None at this time
Risks
None at this time
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Report Date: May 5, 2026
Author(s): Stanley Chan
Department: Financial and Strategic Services
Department Director: Anne Victoor
Managing Director: Diane McMordie
Chief Administrative Officer: William Fletcher