Even though investing in infrastructure was a good plan, servicing the town’s debt is a big expense to the municipality according to Minto Treasurer Gord Duff.
His comments followed an analysis of recent financial indicators provided by the province.
Duff explained “The Ministry of Municipal Affairs has compiled several financial indicators from the 2005 to 2007 financial information returns. The indicators measure such things as debt burdens, reserves per household, and working capital.
“I agree that these measures are useful as overall signs of financial health; however I wish to look beyond the initial figures. As we are all aware, the Town of Minto has devoted significant resources to making investment in our water and wastewater systems. Therefore I have separated these enterprises from the rest of our municipal activities. This analysis shows that the town had added to its deficit largely due to investments in that infrastructure, and has decreased the related reserves to pay for these expenditures.
“When water and wastewater are excluded from the totals, it shows that debts are increasing, but at a much smaller rate. For example, the total debt per household is just over $1,105, excluding utilities, versus $1,973 for the whole municipality.”
Duff added that non-water and sewer reserve balances are actually increasing as water and sewer reserves are being drawn down.”
He said the analysis reinforces the logic behind council’s recent decision to increase water and wastewater rates to cover higher debt servicing costs.
Duff explained the financial indicators were something given to municipalities at both the Association of Municipalities of Ontario seminars and a the last Wellington County treasurers meeting.
He explained the reports “tend to throw out a lot of hubris” and there is a lot of technical financial stuff.
Duff said Minto could be divided into two communities – ratepayers and users.
He quipped that without the water and sewer costs, “we’d be in pretty good shape, and not terribly in debt.”
However those make a difference. Some of the town expenses include new water systems and water towers.
Duff said he wished this information had been available to council three to four months ago.
“Our biggest cost, is the debt servicing.”
Anderson said the municipality had to borrow to complete those projects as it was unsuccessful in certain infrastructure funding applications.
