The Elephant in the Room
We have reviewed the 2017 financial information that the MPH filed with the Ontario Ministry of Municipal Affairs. It is rather alarming.
Port Hope has a debt of $34,605,000 and the interest payment on the debt is $1,502,000/year. This expense does not result in increased services to the citizens and represents 8% of the total tax levy or $205/household.
The Ministry also calculates just how much debt Port Hope can have. In 2017 MPH is at 46% of the amount it is allowed to borrow.
Not only do we have debt but the annual amortization to pay for worn out assets has been calculated as $8,600,000 but the MPH only set aside $2,500,000 in 2017. This is a shortfall of $6,100,000 PER YEAR!
Cobourg, which has a population of 19,440 compared to Port Hope’s 16,753, presents a much different story.
Their total debt is $8,005,000. Their interest payment is $251,000/year or $28/household. Cobourg sets aside the full amount for amortization of $7,113,000.
What this information portrays is a major potential financial problem for MPH if there is a need to replace a large asset. MPH is near the limit for borrowing to finance asset purchases and is steadily losing ground in the amount of reserves required.
We wonder what our candidates for Council have to say about this situation.
A presentation made by in late 2017 the Director of Finance about the Municipal debt can be accessed here.
Last modified: September 27, 2018