ST. PAUL – The Town of St. Paul will explore borrowing nearly million from another financial institution after the province rejected its loan application for the Town’s contribution to an MD Foundation capital project.

During its October 26 regular meeting, council approved a motion directing administration to pursue alternative lending options for the $972,126.24 contribution, rather than immediately drawing the money from municipal reserves.

The decision follows months of discussions with the province after the Town’s application through Alberta’s Loans to Local Authorities program was rejected earlier this year.

Why was the loan rejected?

The Town originally planned to borrow through the provincial lending program, with annual debt payments of $116,913.08 already included in its 2026 operating budget.

However, the province rejected the application in the spring because the Town does not own the asset it is financing.

This has created a financing challenge for the municipality, which is contributing to the capital project without owning the property.

The issue was previously raised during council’s October 13 meeting, when administration explained that the contribution had already been paid and the Town was reviewing how to account for the expense.

Chief Administrative Officer Steven Jeffery and Mayor Glenn Andersen have been in discussions with provincial representatives to resolve the situation.

Those discussions remain ongoing.

Borrowing versus using reserves

Council was presented with two options: seek financing from another institution or transfer money from municipal reserves to cover the contribution.

According to Chief Financial Officer Mitchel Bachelet, the Town had $754,194.32 in unallocated accumulated surplus at the end of 2025.

That amount would not be enough to cover the full MD Foundation contribution without transferring additional money from another reserve.

The Town’s financial report also identified approximately $4.1 million across various restricted reserves. However, those funds are allocated to specific municipal purposes, including water infrastructure, recreation, fire equipment and other capital needs.

Using reserves would require council to consider which funds could be transferred and the implications for other municipal priorities.

Administration indicated that interest rates had not changed significantly since the original budget was prepared, suggesting the Town might still be able to arrange borrowing with payments reasonably close to its budgeted amount.

Province still being asked for answers

During the October 26 discussion, councillors expressed frustration with the provincial lending restrictions and the additional costs that could result from seeking financing elsewhere.

The Town’s contribution to the MD Foundation is intended to support a capital project, but provincial lending requirements have complicated how the municipality can finance its share.

Council also discussed the broader challenge municipalities face when contributing money toward facilities or infrastructure they do not directly own.

Although conversations with the province are continuing, council agreed the Town needs to move forward with another financing option rather than wait indefinitely for a resolution.

The motion to seek financing through another lending institution carried.

The meeting did not approve a new loan. Administration will need to investigate available lending arrangements and their terms before the Town can finalize how it will finance the contribution.