Everybody loves good news, and Meaford's council certainly had plenty of it during Monday's council meeting as the independent auditor presented her report on the 2017 financial statements. The good news is that Meaford is in better financial shape than we've been in years, but don't assume that will mean lower taxes, because as the auditor cautioned, we have a lot of infrastructure that is continuing to age and degrade, and it is going to take millions upon millions of dollars to ensure that our roads and bridges don't crumble beyond use, and that the pipes in the ground don't burst.
As for the good news, this council and the municipal staff they guide should be applauded for continuing to dig this municipality out of the financial hole we were in nearly a decade ago. Particularly noteworthy is that over the past four years the operating expenses in this municipality have been flat-lined at roughly $15.6 million per year. In simple terms, the annual municipal operating budget has not increased since 2014, and in fact last year's operating expenses were roughly a half a million dollars less than they had been the year before, so municipal staff have managed to hold the line on departmental costs for all four years of this council term.
So why have my property taxes continued to increase if operating costs haven't increased, you might ask? The simple answer is debt and infrastructure. While the operating costs have been brought under control, this municipality has been paying down old debt (in 2013 we owed nearly $10 million in long-term debt, but at the end of last year that debt load had been reduced to $6.5 million), the once drained reserve funds have been replenished, and this municipality has spent significantly more each year on infrastructure repair and rehabilitation, primarily roads and bridges.
That's all good stuff. Meaford isn't swimming in riches, but we aren't buried in debt with empty bank accounts as we had been in the past – we're roughly where we should be, and we're now in better shape than many other municipalities. But we have crumbling roads that frustrate locals and tourists alike, and we have closed bridges with another scheduled to be closed this year, and some of the pipes in the ground are older than your average grandparent.
Tens of millions of dollars worth of required bridge repair and rehabilitation work have been identified along with tens of millions more for roads, and without doubt millions will be required for the pipes underground, so while council and staff might be pleased as punch (and they should be) that the municipal finances have been brought under control, and we've now got a lot less debt and a few loonies in the bank, it pales in comparison to what is ahead of us. We'll never begin to conquer the enormous infrastructure deficit facing us if we let off the gas now and start talking about tax reductions. The hard work has been done, but the hardest work is still ahead.
It will be interesting to watch how the next council tackles the infrastructure issue. With vastly reduced debt and healthy balances in the coffers, it could be argued that this municipality is in a good position to take on significantly more debt – we could take on tens of millions of dollars of more debt and still be within the limits imposed by the province, and that would certainly put a big dent into our infrastructure deficit. The catch is we'd then be paying off that debt for decades to come.
Alternately the next council could decide to chip away at the infrastructure problem slowly, using and then replenishing reserve funds, but it would be slow going, and it would be difficult to ever get ahead of the issue.
Steep property tax increases would be another possibility, though it would be less than popular among ratepayers.
What we're more likely to see I think is a blend of new debt for some major projects, along with continued property tax increases to support increased reserve fund contributions. Either way, it won't happen cheaply, so in spite of our current enviable financial position, we're a long way from seeing the line being held on tax rates let alone tax reductions.
As I have written many times before, I don't envy our councillors because the issues before them are enormous, but the past two councils have moved us from doom and gloom to a pretty rosy picture on the financial front, and it is going to take the next several council terms to see if the same can be done on the infrastructure front.