The financial picture for Wellington North is turning a corner from deep debt to positive indicators for its reserves.
It was the picture painted for council at its Oct. 15 meeting by BDO Canada auditor Traci Smith.
“Your financial picture is definitely improving,” Smith told councillors. “Your cash increased by $2 million (and) you’re not in debt overall.”
The auditor’s report indicated the township did not take on any new debt in 2011, the first time in the past four years when it took on about $2.5 million annually. The township paid off about $800,000 in long-term debt last year, but retains about $11 million in debt to be paid.
Mayor Ray Tout credited council and township staff for the turnaround that is seeing the township move into a positive financial position, opposed to the $5 million debt it held in 2008.
“Our tax collection process has changed (and) this has worked hard,” the mayor said. “I think we’re starting to show proof…that we’re headed in the right direction.”
Township finance chairman Councillor Andy Lennox also acknowledged the change in fortunes with long-term debt going down and reserves going up.
“Hopefully we can maintain that direction,” he said.
Council brought in the lowest tax increase in several years at 6.7 per cent in 2011 compared to 10% in 2010 and 8.7% in 2009.
The auditor noted the township’s current tax arrears, with 94.8% collected, were not of serious concern.
In a snapshot of the township’s finances, the auditor noted that obligatory reserve funds, including gas tax and development charges hit $1.142 million last year, compared to $1.173 million in 2010 and $873,000 in 2009. Reserves and discretionary reserve funds came in at $6.115 million last year compared to $5.7 million in 2010 and $3.9 million in 2009. Overall project grants received from the provincial and federal governments dropped 10% from 34% in 2007 of total township revenues to 24% last year due to declines in the grants available.
Council also reduced its own costs from $185,000 in 2010 to $137,900 last year.
“You’re definitely going in the right direction,” the auditor said. “You’re not in a strong position, but you’ve made some vast improvements.”
