Sunday, July 21, 2024

When it Comes to Municipal Finances, Give Credit Where Credit is Due

Stephen Vance, Editor

Our current council, along with the council that served before it, deserve much credit for committing to taking on as little new debt as possible while chipping away at Meaford’s long-term debt, which had grown to roughly $10 million at the start of this decade, and actually following through. As of the end of 2016, Meaford’s long-term debt totals just shy of $7.4 million, roughly 25 percent of the maximum debt that Meaford is allowed to carry according to provincial rules, and 25 percent less than it was six years ago.

How far we have come.

We all remember the horrible position this municipality was in back in 2010, with some $3 million in accumulated deficits that had to be dealt with by draining municipal reserve accounts to virtually nothing, combined with great concern among many residents about the growing long-term debt. A much loathed ‘five year plan’ was implemented, aimed at replenishing municipal reserves and righting Meaford’s financial ship. That five year plan brought with it double-digit municipal property tax increases (softened a little by the council of the day clinging to the optics of “blended rate” increases that amounted to just five percent when the county and school board portions of the municipal tax bill were factored in) not for five years, but for four, due to managing to do in the first four years what had been planned over five.

In recent years property tax increases have been minimal, the municipality has money in the bank, and they’ve been spending more and more each year on road and bridge rehabilitation projects, particularly in our rural areas, and they’ve managed to do all of that without adding to the long-term debt.

If our council had promised you five years ago that the pocket draining ‘five year plan’ would end a full year early, and that rate increases over the next few years would be minimal, and that more money would be spent on roads and bridges, and that long-term debt would not increase but rather it would be 25 percent lower today, I suspect that many would have scoffed and thought something along the lines of ‘yeah, in our dreams’.

Yet that is what has happened, and while I recognize that council-bashing is at times a popular sport in this town, every now and then we need to pause and take stock of what has actually transpired in this municipality over the past few years.

Say what you want about individual council policies or initiatives, say what you want about high taxes compared to other municipalities (we’re actually fairly in line with other comparable municipalities), or say what you like about changes to winter road maintenance, the fact is that it wasn’t that long ago that people were screaming from the rooftops about the state of this municipality, its hefty tax increases and its overall finances, and clearly somebody listened. Well not ‘somebody’, a collective actually. The previous council listened, though they bore the brunt of the rage as often happens to a government that draws the unfortunate short straw of actually cleaning up a mess that was created by governments that preceded them.

Our current council has also clearly listened to the frustration of ratepayers in past years. This council pledged not to add to long-term debt unless absolutely necessary, and they’ve managed to stick to it. This council has pledged to keep annual rate increases minimal while actually increasing spending on infrastructure, and they’ve managed to stick to that too.

To those who might be concerned that the mayor raised the prospect of taking on some new debt given the favourable rates available in today’s market, I would say – don’t freak out.

Council has not pledged to take on more debt, the mayor has simply asked a question of council’s financial advisor – our treasurer. But even if council were to discuss and ultimately decide to take on some extra debt in order to fund a bridge project (which actually they are doing later this year when the ‘Bake Shop’ bridge near Beautiful Joe Park is rehabilitated) or to fund the reconstruction of a badly deteriorated road, I would still suggest you not freak out.

If we’ve learned anything about our current council and municipal upper management over the past few years, it’s that they’ve proven to be responsible with our tax dollars. They’ve been paying down long-term debt taken on by several councils before them, they’ve been replenishing municipal reserve accounts, and they’ve done as much as they can with the dollars they’ve had to work with while resisting the temptation to take on new debt.

But sometimes debt can be good. When interest rates are as low as they are currently, to borrow a few hundred thousand, or even a few million to fix crumbling roads and bridges that will last years beyond the payment terms of the loans, or even to help fund a new library to replace our crumbling and far from accessible facility wouldn’t be such a bad thing.

This council and municipal management team have proven that they take seriously their role in using our tax dollars wisely, and they’ve proven that they have no desire to burden residents with mountains of debt, so I trust them to take on new debt if it’s deemed necessary, and to do so responsibly.

Popular this week

Latest news