PARRY SOUND - The town, per household, is the most indebted of any West Parry Sound municipality.
The debt incurred over the years for upgrading the wastewater treatment plant (which included government mandated changes), sewer and water infrastructure improvements, refacing and renovating the Bobby Orr Community Centre and retrofitting and expanding the Town office has been worth it though, said Mayor Jamie McGarvey.
Debt repayments are expected to peak next year, and then are expected to go down over the next 20 or so years, he said.
In West Parry Sound, McKellar Township is the only municipality that’s been completely debt free for years.
Seguin Township pays off the last of its debt on June 17.
McDougall’s only debt is $347,832 for the new water system, a cost covered by Nobel water users and not by the municipal tax base in general.
Whitestone, at the end of 2011, had $109,913 in debt, for $101 per township household, an amount expect to jump to about $969,913, or $887 per household, if township council approves borrowing for a new municipal building.
Carling’s debt in 2011 was about $1.2 million, or $782 per household, an amount expected to increase to $2.2 million, or $1,426 per house, in 2012 with the new municipal building project and reconstruction of Sand Bay Road. The Archipelago’s debt is expected to go down from about $3.3 million, or $1,104 per household in 2011, to almost $2.8 million, or $919 per household in 2012.
All numbers are based on the 2011 Statistics Canada household survey and amounts given by township staff.
In Parry Sound, the overall debt, including that covered by sewer and water rates and a third-party agreement at the Smelter Wharf, is currently $16.7 million or $5,512 per household: If only the debt covered by general revenue is considered, it’s $6.2 million, or $2,054 per household.
In Parry Sound, much of the work that debt was incurred for was substantially funded by the upper levels of governments’ stimulus funding during the recent recession and G8 funding, including sewer and water line upgrades.
“It’s all been investments in the future – work that had to be done,” said McGarvey. “The trick is if you don’t fix those things up then they fall into really poor disrepair and it ends up costing you more to fix up later on.”
Tighter budget expected in 2013
The debt load is affecting the 2012 and even the 2013 budget.
“This year it made it tight, next year it will make it tighter, to be very honest, and we’ll have to be very prudent, ” he said. “We’re beginning now to take a look at how we’re going to be managing the 2013 budget to make sure these improvements we’ve made to the overall system, that we can manage through it.”
While the debt means future projects the town might have taken on in better financial times won’t get off the ground this year or next, the mayor didn’t speculate on whether it means service cuts are ahead.
“We’ve certainly been looking at revenue sources, trying to increase those,” he said.
Increasing revenue
Revenue streams include the proposed solar generation panels at the transfer station, along with continuing smaller projects such as e-waste and used tire collection.
“There are other things we are looking at to increase revenue without getting the taxpayer hit,” he said.
While carrying debt, the town does have $6.8 million in reserves, to help with such future projects as the replacement and repair of the water tower.
Carling Township is borrowing for its two projects, while it’s reserves that are expected to grow from about $2.6 million, in 2011 to almost $2.8 million in 2011, and discretionary reserves are also expected to increase from $475,340 in 2011 to $481,000 in 2012.
Carling Mayor Gord Harrison said borrowing for capital projects ensures the people reaping the benefit today are those paying, and not those whose tax money was put aside in years past.
It also, he said, makes for a steady tax rate.
“It’s difficult to do everything a municipality needs to do out of reserves,” said Harrison.
“When you finance that way, or in individual tax years, you have years of spikes where the tax rate goes up or down depending on the capital needs that year. So this, it’s easier to maintain a steady tax rate.”
In Parry Sound, the 2012 tax rate increased by 2.5 percent over 2011 and in Carling it increased by four per cent.
Both municipalities cited mandated increased costs such as policing and land ambulance service as contributing factors leading to the increases.