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Council endorses 10-year financial plan

Financial Plan

City of Kawartha Lakes Council has taken a definitive step to ensure the municipality has the means to take care of everything it owns and manages in the foreseeable future. At the July 11 meeting, Council adopted a 10 Year Financial Plan that outlines a strategy for raising the required funds to cover capital and operating deficiencies while paying off a transitional debt by 2027. This is the City’s first long-term financial plan to help maintain service levels and existing assets.

Since the Core Service Review began almost two years ago, Council has received reports of the extent to which the City’s assets, including a vast array of buildings, parks, roads, bridges, fleet and equipment, are approaching the end of their lifecycle and require extensive repairs and accessibility upgrades. Throughout 2016, there were reports and recommendations by staff offering ways to trim the asset footprint to a more affordable size, including reducing the number of ice surfaces, community halls, libraries and service centres. Even with recent consolidations of buildings, the City maintains responsibility for $3.2 billion in assets.

Adam Found, Manager of Corporate Assets, oversaw the development of the Asset Management Plan that informed the 10 Year Financial Plan. He stated, “The City has a $30.3 million problem. About a third of that is infrastructure deficit, a third is a tax support gap and a third is our capital reserve deficiency.” He continued, “Recent indications of the problem include a variety of emergency repairs to assets such as the roof at City Hall, the Old Gaol Jail wall and multiple sand domes. Service deficiencies, such as the unacceptable deterioration of paved and gravel roads, are occurring due to lack of capital investment and maintenance.”

Found explained in his report and presentation to Council that continued deferral of capital investment and maintenance is not an option. Continued depletion of already highly inadequate reserves is also not an option. There are only two ways to solve the problem our City has been facing for many years. One is to reduce service levels, and the other is to maximize non-tax revenue and bring the tax levy and capital reserves to sustainable levels.

The 10 Year Financial Plan includes a $25 million debenture (low interest loan) that facilitates the transition to financial sustainability and lessens the sharp impact of the 2018-2019 operating pressures. It also stabilizes forecasted average tax increases and provides for a controlled decline in tax increases over the ten years of the debenture.

“We can’t maintain over $3.2 billion of assets on tax support alone. It is time to face our financial situation and realize that smart borrowing will allow us to take care of everything we own, with a plan to pay it down steadily over the next decade. Anything else is continuing to bury our heads in the sand,” commented Mayor Andy Letham.

The presentation, report, Asset Management Plan and 10 Year Financial Plan are available on the City’s website on the Budget and Finance page.

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