The Village of Cumberland approved its latest budget at the Jan. 13 meeting, one that relies heavily on borrowed funds.
Council passed a motion to adopt the 2020-2024 financial plan bylaw at the meeting, though Coun. Jesse Ketler pointed out some numbers that could present an obstacle should the Village find itself needing to borrow for other major projects in the future.
Specifically, she referred to the more than $242,285 in debt interest the Village will pay in 2020. This will rise in subsequent years of the plan to the effect that the debt interest will be just over $451,000 for 2024. Ketler said that a one-per-cent tax increase represents $25,000, so almost a half-million dollars a year in interest is a considerable amount to service.
“It will, I’m sure, hamper future endeavours of the Village,” she told council.
The staff report to council for the bylaw notes that typically property value tax is the primary revenue source for municipal government when it comes to general operating funds. However, for 2020, this becomes the third-highest source. Property value taxes and payments in lieu represent about 18 per cent of revenue for the year.
For 2020, the highest amount comes from borrowing. The roughly $5.8 million represents a third of the revenue for Cumberland this year. Of this, $4.2 million represents the amount borrowed for the construction of the new fire hall, an issue that received voter assent through the alternate approval process (AAP) in late 2019.
“We’re building it, but it does have consequences,” Ketler added.
When the responses were tallied in December, opposition fell well short of the required 10 per cent threshold for the AAP. The Village received only 57 letters of opposition. There would have had to have been 310 submitted for the bylaw not to proceed.
When council was presented with plans for the fire hall in the fall, Ketler said she was not opposed to the idea and understood the need for the new fire hall, but she expressed concerns about the level of debt the Village was taking on, especially in light of other projects. Cumberland is also facing wastewater treatment capital upgrades.
The staff report also notes grant funding makes up 29 per cent of municipal revenue for the year, making it the second-largest source. This comes from an Investing in Canada Infrastructure Program federal and provincial grant to fund the major upgrades to the community’s wastewater treatment facility.
Other sources for revenue include sales of services and fees (14 per cent), parcel taxes (3 per cent) and miscellaneous revenue, including donations, developer amenity funds, grants from non-government sources, investment revenue, permits and licences (3 per cent).