Town of Collingwood Financial Update


Council Continues to Pay Down Debt

It is budget time, and Collingwood Council continues to work with Town Staff to finalize figures to approve the 2018 budget. Council has been committed to paying down debt this term, as indicated in an update provided by Treasurer Marjory Leonard on Monday February 5th.

Leonard presented a report to the Strategic Initiatives Standing Committee and Council on Monday February 5th. The report was prepared by Michael Switzer, Manager of Finance/Deputy Treasurer for the Town of Collingwood.

The purpose was to provide an update to Committee and Council on the annual tracking of the Debt Management Plan implementation.

“The purpose of this report was to provide Council with updated information regarding our current and potential external debt and internal loans and note position. What this report tells us is the Town’s debt situation is slowly improving but it is not in a position to take on additional debt in any form beyond what has been committed.”


The Numbers That Matter

Collingwood Treasurer Marjory Leonard has reported the debt reduction activity of the current council.

Outstanding External Debt
When the sitting council took office in 2014 the outstanding external debt was $37,022,620. This figure has been reduced by 9,027,876 to $27,994,744 as of December 31, 2017.

Internal Debt
The Internal debt at December 31, 2014 stood at $8,935,273. This figure has been reduced by $2,177,406 to $6,757,867 as of December 31, 2017.

Committed Debt
Committed Debt was $2,500,000 at December 31, 2014 and has been reduced by $1,130,000 to $1,370,000 as of December 31, 2017.

Add the numbers up and the total debt for the Town of Collingwood as of December 31, 2017 sits at $36,122,611 as compared to $48,457,893 as of December 31, 2014, a decrease of $12,335,282 over the first three years of this council’s term of office.

Mayor Sandra Cooper has been unavailable for comment.

Deputy Mayor Brian Saunderson says it has been a goal of council this term to deal with the debt issue it inherited. He points out that the current Council has incurred no new debt and has paid down approximately $6 million over the past 3 years. He added the Town’s external debt is the lowest it has been since 2007.


Here are some highlights of the Staff Report:

“The BMA report states that credit rating agencies recommend debt servicing costs should be below 10% of own source revenues. The Town’s policy is that debt servicing costs not exceed 7% of own source revenues. “

The report states the Town’s external debt servicing costs alone exceed the policy by roughly two and a half percent. This coupled with the Town’s levy per capita being the highest in its peer group based on the 2016 BMA assessment of the Town’s financial health, and a high reliance on the residential assessment, limits the Town’s flexibility to fund programs and services and respond to unforeseen expenditures.

At the August 21, 2017 Council meeting, Council adopted the Debt Management Policy which identified the following goals on debt:

• Total tax supported debt servicing costs as a percentage of Town Own Source Revenues shall not exceed 7%.
• Total water rate supported debt servicing costs as a percentage of Water Utility Own Source Revenues shall not exceed 7%.
• Total wastewater rate supported debt servicing costs as a percentage of Wastewater Utility Own-Source Revenues shall not exceed 7%.


As of December 31, 2017, total external debt has decreased to $27,994,744 from $31,521,946 in 2016

As of December 31, 2017, total Internal Loans & Notes has decreased to $6,757,867 from $7,858,295 in 2016.


Committed External Debt

Committed external debt refers to capital projects that are completed or underway and were approved based on debenture financing which has not yet been placed. It is estimated this debt will be placed sometime in the foreseeable future.

As of December 31, 2016 the Total Committed External Debt for 2017 is set at 1,370,000, compared to $2,100,000 the previous year.

Potential Debt

Potential debt amounts are based on both the 2018 capital budget requests and discussions with management. The funding sources for these projects are unknown at this time.

Council may or may not proceed with any of the following items below:

PRC
• Sunset Point Park Redevelopment – $200,000
• Eddie Bush Refurbishment Phase 3 – $750,000
• Eddie Bush Refurbishment Phase 4 – $750,000
• Water Front Master Development Plan – $17,000,000

In her report, Leonard stated the total potential new debt that could be contemplated in the next five years to be $18,700,000.

“It continues to be the recommendation of this report that no additional debt, beyond what has already been committed, be assumed.”


The 2018 Preliminary Budget was presented to the SIC Committee on February 5, 2018

CLICK HERE to view the 2018 Preliminary Budget Presentation

CLICK HERE to view the 2018 Preliminary Budget



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