WHITEWATER REGION – Whitewater Region council learned it has debentured $2,210,907.48 from the 2018 budget for this year’s budget. The term of debenture is based on the useful life of what was debentured.
The debentures are for:
A 2018 John Deere backhoe, $126,497.94 and a 2018 Freightliner tandem truck, $253,920.95 were each debentured for 2.68 percent over five years. He did note both should last longer, but five years is reasonable.
The reconstruction of Anderson/Watchorn streets in Beachburg was debentured for $230,488.59 with an interest rate of 3.01 percent over 10 years.
The debenture for the reconstruction of Truelove Street in Cobden, which included water and sewer, is $1,600,000 over 20 years at a 3.39 percent interest rate. The debenture is split between public works, water and sewer.
In previous years, money would be put in reserves to pay for various large-ticket items or self-finance it over three years, explained CAO Tremblay.
However, the number of capital works that has to be done has significantly impacted cash flow, he said.
Councillor Chris Olmstead said these numbers reflect “why we need smart, economic development, that we need to spread this over the tax base. Costs don’t go down on anything, they just go one way.”
That’s why it’s important there be growth in Beachburg, Cobden and Westmeath, he said.
“We need to keep hammering economic development to really reduce per taxpayer the load that they carry,” Coun. Olmstead stressed.
Councillor Neil Nicholson agreed that borrowing has to be done to facilitate economic growth. However, he questioned what percentage of the tax collection base is already debentured.
“How much debt are we carrying,” he questioned.
That information will be provided in the financial statements to be presented to council at the February 20 meeting, CAO Tremblay said.
“We are well within our debt limit,” he said. “The issue is you will not get senior level funding, and there are municipalities in Renfrew County that are applying for it, if you don’t have debt.
“We have three tools to pay for these things: debt, user fees and taxation and senior level of funding.”
If the tandem truck dies and is not replaced, that route still has to be plowed, and that’s why long-term planning is being done, CAO Tremblay said.
Eventually, he hopes to finance the fleet through reserves and financing through debentures for large projects, such as Truelove.
“The honest truth is we’re not there, so until we get a full sense of our asset management strategies in place, we have to take the tools that are available to us,” CAO Tremblay stated.
