Cornwall debt kicks off first day of 2022 budget talks

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Cornwall City Council began its 2022 budget deliberation process on Tuesday afternoon, in the first of a handful of virtual meetings.

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The initial draft of the 2022 budget asks for an additional $2.5 million from taxpayers.

Chief Financial Officer and Treasurer Tracey Bailey worked on the draft document for over an hour during the meeting. What she addressed included that the operating portion of the budget, if approved, would see an increase of $2,565,523 from local ratepayers, as well as $1.6 million from ratepayers in the capital budget. .

The issue of the city’s indebtedness was also discussed at length at the meeting, by both Bailey and councillors.

The City’s debt charges will increase by $1,774,399 or 32.75%, from $5,417,860 in 2021 to $7,192,259.

“In 2021, the city’s existing debt of $50.45 million required payments of $6.7 million in principal and interest,” Bailey said. “The city’s own-source revenue is $126.9 million.

The city’s long-term financial plan recommended capping the annual repayment of its debt at 10% of its own-source revenue. Given that the city currently has $6.7 million in annual debt repayments, that figure sits at 5.3%.

“The city’s self-imposed 10% debt limit would allow it to borrow an additional $77.5 million for a total of $118.7 million,” Bailey said. “That would equate to an additional $6.7 million in annual principle and interest expense for a total of $12.9 million.”

Although the city remains within its annual debt limit, Bailey said it will fund a handful of major projects over the next few years. This includes the Municipal Works Yard, the new Fire Hall, the Arts and Culture Center and the reconstruction of Marleau and Brookdale Avenues and Pitt Street.

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“Based on the 10-year capital plan to 2031, the city plans to fund $95.2 million in capital works and asset replacement,” Bailey said. “While these projects are included in the table, the city hopes to secure higher levels of funding.”

She said the city is expected to slightly exceed the 10% debt repayment cap in 2027, by about $75,000. That’s based on his current borrowing plan.

Bailey also said the municipality’s long-term financial plan recommends that debt financing be used for projects involving major investments greater than $2.5 million and having a life cycle greater than 20 years.

“Specifically, debt financing should only be used for new or non-recurring infrastructure needs and installations,” she said. “One of the financial policy recommendations of the long-term financial plan is that over a 10-year period, the city would shift capital funding from debt funding to reserve funding, based on life cycle cost. “

  1. Draft Cornwall Operating and Capital Budget cover page for 2022.

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    The Eastern Ontario Agri-Food Network is asking the city for $25,000

  3. The entrance to the Cornwall Wastewater Treatment Plant.  Photo taken Wednesday, May 12, 2021 in Cornwall, Ont.  Francis Racine/Cornwall Standard-Freeholder/Postmedia Network

    Cornwall 2022 water and wastewater budget up 2.99%

Com. Syd Gardiner reiterated that he is tired of increasing the City’s debt, considering that two costly projects are on the horizon: the construction of a second water intake for the City and the future closure of the site. landfill.

“They (taxes) will be so high that middle-class people won’t be able to afford them,” he said.

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The cost of these two projects was not taken into account in the debt figures presented to the council on Tuesday. According to Bailey, it was too early to know exactly how much the second water intake will cost the municipality.

“What we have included in our long-term debt schedule is all that is known at this time,” she said.

“The EA (environmental assessment) plan currently shows a timeline of about 10 years (for the creation of the second water intake),” added Bill de Wit, director of the city’s municipal works division. “We hope that we can shorten this time frame with funding from federal and provincial sources.

“This year, in our capital budget, we have funds to do preliminary work on some preferred sites.”

The future closure of the landfill — which an accountant hired by the city says could cost more than $50 million — is constantly monitored by city officials.

“The city won’t be able to save $40 million to $60 million for the landfill,” Bailey said. “We will have to put in place initiatives so that it has a longer lifespan or we will have to think of other measures to extend the use of this site and not close it.

“These are all conversations we plan to have with councils over the next decade.”

Budget deliberations will continue on Wednesday afternoon.

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