I received the following comment from someone obviously in the know regarding the real fiscal/budget situation in the Town of Collingwood. This topic has hit a bit of a nerve with people who obviously know better than the “official” rhetoric coming from town hall. I will make my own observations later, after I get a chance to meet with the person who penned this comment and go over some supporting documentation, so stay tuned. This is an important issue that will affect all of you and your children for many years to come.
I read your blog about the debt and also the comment from “Richard Hill”. The above slide was part of a power point presentation by then Economic Development Office Catherine Durrant. The presentation was done before the Wellness Centre was removed but some costs were still incurred. While the previous council did increase the overall debt by about 15 million dollars from December 2006 to December 2010 it should be noted a) that they also increased the asset side by 39 plus million dollars by leveraging a 16 million dollar investment with funds from others. The interest rates were historic lows (for our generation). Go back into the archives and look at the December 6th 2010 Council Agenda this current council’s first real meeting. The debentures were voted on and passed unanimously. If the political rhetoric were anything but hyperbole this Council had the opportunity to transfer from the reserves funds to lessen or eliminate the amounts on the individual debentures. If they were serious fiscal managers as they campaigned that they were, they had the opportunity and failed!!!!! Please do not compliment them on their ability to manage fiscally our Town.
The necessary funds to finance the debt are evident in the 2011 budget surplus report; 2.2 million dollars surplus of which 1.7 million dollars was the Town of Collingwood’s portion from new growth assessment dollars. Of that 1.2 million dollars would have carried the above 16 million dollar our share of infrastructure investment payments-principal and interest still leaving about a 500k dollar surplus which is an approximate 2% cushion to absorb increase operational costs for the Town. It may look like these folks are managing our funds well but they are not as indicated by Mr. “Hill’s” comments. The 2006-2010 Council was very much aware that approximately 20.3 million dollars of our debt was being carried by property taxes (the remainder of the debt was carried by user fees and other sources). The previous council knew that growth could and would in fact both carry the majority of the Town’s portion of investment in our future and also insulate us all from the ongoing trend of upward costs of running the Town. So the town got 2 of 4 years of minimal overall tax increase and yes 1 year with an overall tax decrease.
The growth from new assessment is now about 1/3 of what is was in 2011 (2009-2010 new development from the council term). The ability to absorb future tax increases has diminished dramatically. You can see from the reports that the tax stabilization reserve is being added to; why, well in effect it allows council to balance the ups in costs of running our municipality by transferring from this reserve to make a smaller tax increase. It is political smoke and mirrors. These folks are the worst fiscal Managers I have witnessed in my many years in Collingwood. A reckoning will occur with no limited options-I agree with Mr. “Hill’s” assessment the next council will have a major hurdle to limit the damaging effects of this council’s fiscal incompetence.
The interest charges that the town were able to finance projects at were significantly lower than previous councils. I still like the analysis that if you had to buy a home for 300k and someone else paid 200k and financed your portion at 30 year low interest rates would you turn down that deal? The 2006 election the new library was a key topic in that election. It was clear the public (the majority) were in favour of that project including both mayoralty candidates. The other projects were infrastructure improvements that many commercial and industrial taxpayers wanted, sewer improvements were a must, and a lot of locals wanted both Poplar Side Road and First Street improved as well. The rhetoric drives me crazy in that it is such a play to the cheap seat of politics. This current council plays to the emotions of the electorate-they are not leaders-they are manipulators.
A Concerned Citizen
Note: I apologize if you feel that I am posting too much of late, but as you can see above this stuff writes itself.