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Auditors report noticable improvement in Town’s net debt situation

June 23, 2016   ·   0 Comments

The Town of Orangeville’s auditors presented their findings on the town’s financial situation at a recent council meeting. The report highlighted an strong improvement in net debt over the past three years.

According to Orangeville Treasurer Marc Villeneuve, the decrease in net debt is driven by an increase in the Town’s annual surplus. Other highlights from the report show that discretionary reserves have increased over the past few years. Discretionary reserves can be allocated to items such as water and sewer, roads, or general government items. Obligatory reserves have doubled since 2011. These reserve funds are items such as transportation grants, gas tax funds, and development charges.

A key item that has helped the town’s financial position is increased tax revenues, driven by the greater assessed value of properties and the overall increase in the tax levy. What this means is that residents in truth are being hit twice with an increase; houses are rising in value and the town is charging more annually for services offered. Mild winter weather allowed the town to save significantly on transportation costs. Winter control costs are a variable that cannot be predicted. Milder winters benefit the town financially.

The police budget is the Town of Orangeville’s single largest annual expense. The costs associated with police services represent 21.51% of total annual expenses. It should be noted that this percentage is down from 2014 by approximately a half percentage point. Part of this change is due to the strong financial management of Police Chief Wayne Kalinski. In 2015 the service actually had a surplus for the first time in many years.

Water and sewer charges increased their share of total expenses by over 1% in 2015. The town’s treasury department shared that expense reductions in other areas such as transportation were a contributing factor to the shifting expense shares.

The report does acknowledge that there is an ongoing capital deficit. The capital deficit (unfinanced capital needs) on the financial statements represent capital costs incurred but not yet financed. In addition, many municipalities, including Orangeville, also face an infrastructure deficit which is not reflected as part of the financial statements. Infrastructure could be deteriorating with roads that are needed but do not have funding available to support construction.

The BDO audit was conducted under the leadership of Sally Slumskie. Ms. Slumskie’s final findings show many encouraging things. Specifically, capital assets continue to grow in value (up $6 million since 2011) and the general deficit has declined to its lowest levels in five years. Lastly, reserves and discretionary reserve funds have almost tripled since 2011. ($5.3 to $14.7M). Reserves have been a contentious Council issue for some time now. Clearly, this administration has made some positive financial progress during this term.

Written by Jasen Obermeyer

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