“Yay! That’s a big deal everybody.”
Mayor Greg Wilson had to stop last week’s virtual council meeting to throw his hands up and cheer during Treasurer Steven Lansdell-Roll’s latest report on the city’s financial situation, as after a decade of being stuck between a rock and a hard place has paid off.
Since the mid-to-late 2000’s, city councillors in Dryden have been staring down the barrel of $16 million plus interest in debt, which handcuffed the city’s ability to spend on infrastructure, recreation and a number of other initiatives.
Increasing spending by council, a lack of economic growth, a reassessment of the Domtar mill’s property taxes and continuing financial losses related to the Dryden Municipal Telephone System all contributed to the debt, which isn’t expected to be fully-paid off until 2030.
In 2019, the city paid off $3.4 million of their debt, or roughly 11.3 per cent of the total $16.4 million debt. The $3.4 million payments represented just under a quarter of the city’s total property tax revenues.
But councillors have had their eye on 2021, as by the end of this year, two-thirds of the debt will be paid off, and the city’s debt servicing charges will drop down to $1.06 million next year, leaving councillors with an additional $2.3 million to invest into the community each year until 2030.
Reaching this point in the city’s long-term debt repayment plan is listed as a goal in the city’s Strategic Plan, in effect between 2020 and 2025, which also aims to develop Dryden’s waterfront areas, build additional tourism activities, support a community well-being plan and many more important initiatives.
While councillors could have continued to increase taxes to balance their budget, Dryden hasn’t seen a major increase since 2013. But from 2001 to 2013, residents faced compounded tax increases of 5.75 per cent each year, which councillor Norm Bush said “left scars” on the community. They increased by 10 per cent in 2012.
The top four things that the city currently spends its tax dollars on include transportation and road costs estimated at $0.34 per tax dollar, policing costs at $0.24 per tax dollar, recreation and culture is roughly $0.12, and social services are estimated at $0.11.
In a January, 2019 council meeting, councillor Bush said 2019’s small 2 per cent property tax increase, worth about $270,000 would be ‘rebated’ to taxpayers in 2021, as the city had lower debt repayments to deal with.
All councillors and deputy mayor John Carlucci were all in support of the idea, as long as the plan for the rebate is in place. Mayor Greg Wilson and councillor Shayne MacKinnon were not in attendance.
Now, as Treasurer Steven Lansdell-Roll continues to develop Dryden’s draft 2021 capital and operating budgets, council expects to pass their budget next month with no property tax increases, no water or sewer increases and only a small $87,150 deficit – which is expected to be covered through reserve funds.
Lansdell-Roll’s report notes that when department managers delivered their initial draft budget requirements for 2021, staff expected a nearly $1 million operating deficit, which leadership have worked to minimize.
“The fact that we’re only at a $87,150 deficit is no small feat,” said Lansdell-Roll. “This budget has had to accommodate $400,000 in reduced user fees at the rec centre and airport due to COVID, and we anticipate there will be 2021 impacts, due to the pandemic on our user fees.”
City staff have also been navigating additional downloading costs from the provincial and federal governments, including increasing payments to Pinecrest Home for the Aged, the Northwestern Health Unit and the Kenora District Services Board, as well as uncertainty around provincial grant allocations.
Dryden saw about $2.3 million of funding from the Ontario Municipal Partnership Fund in 2020, but are expecting a roughly $100,000 reduction by 2021. Ontario also provided just over $660,000 in additional infrastructure funding, as well as funds to assist with the COVID-19 pandemic.
While the city’s finances are a little tight in 2021 due to the pandemic, councillors are expecting to finish off 2020 with a significant surplus of roughly $950,000, also due to lowered municipal expenses and staffing levels throughout the pandemic. It will be allocated to the city’s reserves.
The city posted an over $500,000 surplus by the end of 2019, which was rolled into their overall reserves, bringing them to about $4.5 million. Having roughly $5.5 million in the city’s reserves by the end of 2020 would have been a dream, a decade ago.
For more information:
No water rate or tax increases in draft 2021 budget
Council passes interim budget