New Tecumseth council delved into the town’s long-term financials during an Aug. 25 working session. Here are some takeaways from the discussion.
The town has forecast annual tax increases up until 2030, assuming a reasonable increase between zero and three per cent.
The town’s manager of corporate services, Lori Bedford, said the lone exception is for the 2022 budget, which has been forecast at 8.03 per cent. However, she emphasized this is not a commitment, and staff won’t bring forward a budget with an increase this high.
“There are lots of opportunities to mitigate or rearrange some of the items,” she said.
LEVY INCREASES 2023-30
2023: 4.54 per cent
2024: 2.59 per cent
2025: 2.17 per cent
2026: 3.27 per cent
2027: 2.29 per cent
2028: 2.46 per cent
2029: 1.18 per cent
2030: 0.3 per cent
Water rates are also forecast using an annual increase of four per cent.
. The reserve account is set to become negative starting next year to the tune of almost $27.5 million.
Over the next decade, the town is also facing millions more in shortfalls to replace aging infrastructure, including a $54-million funding gap to pay for water and wastewater projects.
The asset-management reserve is currently sitting at $13.6 million, but this account is set to go negative to the tune of $21.5 million starting next year. The account is currently on track to remain negative up until 2030, at which time it will be more than $65 million in the red.
In recent years, council implemented a 0.5 per cent charge to the annual levy increase to start building up the reserve.
High-value DC projects include:
Fire Station 4: $7.5 million
Fire Station 3 expansion: $2.5 million
Indoor pool: $24.8 million
New Beeton arena: $17.5 million
New ice pad: $15.3 million
New roads facility: $9.4 million
14th Line widening: $8.4 million
MacKenzie Pioneer Road upgrades: $11.3 million
Dayfoot Street reconstruction: $20.7 million
New storage reservoir: $11.5 million
Collingwood water plant upgrades: $63.2 million
Regional plant expansion (Phase 1): $59.4 million
Beeton infrastructure improvements: $4.6 million
WATER, WASTEWATER FOR NEW DEVELOPMENT
Bedford said the town only has unassigned capacity for an additional 50 to 80 homes, plus capacity for new industrial development. Additional water supply from the Collingwood pipeline isn’t expected to be available to the town until 2025.
She said some developers that have not started building have already been assigned water capacity, but the town may need to revisit this in order to service more shovel-ready projects.
“We have to turn over every rock we can find in order to find available water to give to developers or builders or residents or industry that is ready to go,” she said. “The sooner they are ready to go, the sooner we get our development charges, which funds the greater growth needs for water.”
As of 2020, the town’s long-term debt was hovering around $65 million. The town is on track to exceed its debt limit capacity, which is 25 per cent of its annual revenue, by 2025. However, Bedford said this will not be the case if council decides to defer capital projects, like recreation improvements, to later years.