- Municipal Council
- Chronique du maire
The issue of the Town’s debt, deficits and management of public finance is often raised at Town Council meetings. And that’s a good thing! When governments amass deficits and grow their debt, they are doing nothing less than limiting future generations’ room to manoeuvre. That said, for municipalities, the issue of debt comes with a unique set of considerations.
By law, towns and cities are not allowed to run a deficit. To put it another way, they are required submit a balanced budget every year. Of course, that doesn’t mean the budget can’t include debt servicing for infrastructure expenditures, such as maintenance and other costly work on streets, water distribution and sewer systems and municipal buildings. Borrowing is almost always a necessity for projects like these. What’s more, it can be a good thing because it benefits both current and future generations. That is the reasoning behind spreading the cost burden over 20 or 25 years or even longer. And, it goes without saying, the Town takes exceptionally good care of its infrastructures.
So what about the debt? Town of Mount Royal’s debt is strictly controlled. It should also be viewed in comparison to our constantly growing tax base.
The Town’s debt went from $23,227,579 in 2008 to $25,212,100 in 2018, fluctuating only slightly from year to year. During the same period, we repaid a $4.3 million debt for drinking water to the city of Montreal and invested in several major projects, including installing artificial turf on soccer fields, expanding the library and rehabilitating the Rockland overpass.
However, when we compare the Town’s debt to its tax base – in other words, to its substantial and constantly growing taxable property value – we see that our debt ratio is very acceptable, even modest in comparison to other municipalities in the Urban Agglomeration of Montreal.
Unsurprisingly, the coming years will see the debt increase, though always in a controlled manner. In and of itself, the funding for the new sports and community complex will partially rely on borrowing. The Town also recently began increasing the pace of reconstruction and repair of its roads and underground infrastructures. Besides ensuring their longevity, the idea is to take full advantage of various government programs, which usually have a minimum investment threshold.
The bottom line? As usual, Town of Mount Royal’s finances are in excellent shape and its debt, which changes as the era and projects do, continues to be well managed. In fact, it is precisely this strategic and disciplined management of public finances that allows us to consider investing in new and promising projects, like the sports and community complex soon to grace our Town.