Collingwood’s financial health ‘robust,’ says mayor as council begins budget deliberations

Collingwood councillors are aiming to maintain 2020’s tax rate into 2021, and avoid an increase for residents put under financial pressure thanks to the coronavirus pandemic.

Any increase in operational spending at town hall should be limited to two per cent over last year and tied to any increased assessment in 2020, based on an earlier direction given to staff by council in September.

“I hope we can come in (without a tax increase), understanding the COVID pandemic has put a lot of stress on our municipal budget; it’s put a lot of stress on our residents, so we want to make sure that we are able to meet their needs with no tax increase,” Mayor Brian Saunderson told Simcoe.com, before council’s strategic initiatives committee reviewed some of the numbers at its Oct. 7 meeting.

The town’s overall financial health is fairly robust, said the mayor, with its financial position over the last seven years swinging from a position of being $7.5 million in the red, to more than $34 million in the black.

That includes the $18.5 million realized from the sale of the regional airport and the town’s share of the electricity utility, but also takes into account $8 million in liabilities representing the grain terminal.

The town has also decreased its debt position from $35 million in 2015 to around $20 million at the end of 2019, after the previous council adopted a ‘pay-as-you-go’ philosophy. That means not taking on any new debt in an effort to decrease the carrying costs of the town’s existing debt to seven per cent of its revenue.

That number currently sits at just over eight per cent.

However, said Saunderson, council could consider taking on debt for projects that have a lifespan over several generations of residents.

“It makes sense, in some respects, to incur longer-term debt to pay for assets that will be used three generations from now,” he said. “To make the current generation pay for everything, which is the effect of pay-as-you-go, is an inequitable distribution of the cost of an asset.”

The town’s dedicated reserve accounts are quite healthy, he emphasized, and currently sit at more than $64 million. In terms of cash and short-term investments, the town is sitting on $124 million. In both cases, the town is sitting well above the provincial benchmarks.

However, holding the line on the tax rate for 2021 doesn’t necessarily mean the town won’t be collecting more from taxpayers. As part of this year’s budget discussions, councillors will consider adjusting the special capital levy from .75 per cent to two per cent; the average residential taxpayer pays a levy of $17, and increasing it to the level recommended by former treasurer Marjory Leonard in her final report to council would hike that to $43.

Council will carry on its budget discussions in November.