Not only has the town received over $600,000 in provincial funding, it recently passed a bylaw to borrow more.
On Jan. 24, finance director Sharon Marshall said, “The good News is that the Ministry of Finance announced Erin’s allocation under the Ontario Municipal Partnership Fund – $654,000.”
That is up $6,900 from last year, she said.
Debenture update
Marshall noted that on Jan. 10 councillors passed a resolution to participate in the debenture with Wellington County for a loan in the amount of $2.1 million, with a repayment term of 20 years, for the construction of the Hillsburgh Fire Hall.
Marshall said the bylaw authorizing the actual debt and terms of repayment would come to council at a later date.
She said the county is still working with its fiscal agents to determine the structure and timing of the debenture.
However, Marshall said, “We have been advised this week that the 20-year fixed interest rates are prohibitively high right now. For this reason, the council fiscal agent is recommending that we structure out loan terms with locked-in 10-year rates, amortized over 20 years. There are advantages to this structure in interest savings and flexibility of payments.”
She anticipated being back to council in a few weeks with a list of term options.
Temporary borrowing
Marshall also told council she drafted the annual temporary borrowing bylaw to cover shortfalls in cash flow on expenditures until tax revenue is collected.
The interest rate applied to such temporary loans would be prime plus 0.5%.
She said the Municipal Act allows municipalities to borrow only to 50% of estimated revenues between Jan. 1 and Sept. 30, and up to 25% of estimated revenues for the remainder of the year.
In 2011, the estimated municipal revenues were $7,982,331 – allowing a maximum 25% temporary borrowing limit of $1,995,583.
Despite that, Marshall noted the agreement with RBC authorizes a borrowing limit of $650,000 at a time.
“I’m happy to report that in the last two years, we have not gone into overdraft or needed to borrow money. Hopefully that won’t happy this year either,” Marshall added.
Reserves bylaw
For many years, it has been council’s practice to identify capital projects that are under-spent, or incomplete, compared to the approved annual budget.
Marshall said if those projects are funded, or partially funded with tax dollars, the amount of under-spending, or variance from budget, is set in reserves for future projects specific to that department.
For December 2011, Marshall reviewed costs with all department heads, and identified capital projects that vary from the 2011 budget. Where the tax dollar commitment is under-spent, Marshall recommended those amounts be transferred into reserves for the 2011 year-end.
That reserves bylaw suggested $172,570 be transferred into various reserves. “The money is there to complete the projects,” Marshall said.
Councillor John Brennan said the basic premise is that the projects will go ahead.
“That is correct,” Marshall said. All three bylaws later passed without further comment.
