Kamloops city hall needs a $40M payday loan

City hall is running out of its savings, so it’s looking for a loan to get by until Kamloops taxpayers cough up cash this summer.

Council will consider whether to get a $40 million payday loan before tax collection later this year.

According to a staff report, it’s a decision that hasn’t been needed before because reserve accounts could back city hall funds if annual tax money was running out.

“In the past, the City could rely on significant investments tied to reserves for future operational expenditures and capital projects,” a report to council reads.

But council has since been cutting taxes and reducing developer costs while taking on expensive projects, like the Build Kamloops facilities, putting a massive dent in city hall reserves.

According to the report, there’s a six-month window between the city’s fiscal year and property tax collection, which “significantly impacts” how it will pay staff and contractors. For 2026, the city forecasts at $162 million tax base, but it’s a small enough loan that voter approval isn’t required.

If approved, the $40 million short-term loan would be paid by June or July. The BC Municipal Finance Authority loans money at a set 2.8 per cent interest rate. It can only be used for budget items already approved, but it’s not clear whether the entire amount will be spent before this summer.

Meanwhile, city hall debt is currently expected to peak in 2029 at $426 million, mainly due to big projects like the downtown arts centre, the arena multiplex and the not-yet-approved RCMP detachment.