Hard times ahead for County taxpayers, AWARE Simcoe warns

News release from AWARE Simcoe — COLDWATER ON, JULY 24, 2010 — Incumbent Simcoe County councillors have been spending like there’s no tomorrow – leaving a legacy of crushing debt in a period of projected declining revenues.
In addition, a projected downgrading of the County’s current AA credit rating status to single A will lead to increased borrowing costs. The gloomy picture is contained in the 2010 Strategic Plan financial projections presented to County Council at its June 22 meeting.
“The County is living dangerously,” said Don Morgan, interim chair of AWARE Simcoe, a non-partisan citizens’ group that’s working for increased transparency and accountability at Simcoe County and local municipalities.
At the June 22 meeting, county councillors congratulated themselves on having spent a “30-cent dollar” on capital projects.
“The problem is they don’t have the 30-cent dollars,” said Morgan.
One of the consequences of this pattern of expenditure is a desperate need for growth so that new taxpayers can pay a debt being incurred now that is unsustainable for the present taxpayer. 
The new infrastructure that is part of the debt – like the $40 million administration centre expansion – aggravates matters by increasing the cost of operation.
The County’s calculations, based on estimates [of fiscal trends and interest rates] and on assumptions [of provincial funding and an economic recovery] show that:
Current capital expenditures, now at 25 per cent of total expenditures, will fall to 11 per cent by 2013, up to 13 per cent for 2015 and 10 per cent thereafter.
Revenues will decline from $439.2 million in 2010 to $328.9 in 2011, not reaching 2010 levels again until 2017.
Debt costs will rise from $5.4 million currently to $18.6 million in 2016 and $22 million by 2020.
Debt as a proportion of operating revenue will rise from 24 per cent in 2010, to 35 per cent in 2011, 45 per cent in 2012 and 71 per cent in 2015. A debt-to-revenue ratio of above 45 per cent would trigger a change from AA to A credit rating by Standard and Poor’s, increasing the county’s cost of borrowing. [Durham, Halton and York regions have AAA credit ratings. Barrie has an AA rating.
AWARE Simcoe is calling for a return to the prudent fiscal management that once was a hallmark of local government in Simcoe County.
 “Our children, if they choose to stay in Simcoe County, won’t be able to foot the bill,” said Morgan. “We need accountability for this kind of projected debt and our elected officials and bureaucrats have to do a better job of keeping spending in check.”
About 60 people attended an AWARE Simcoe meeting in Coldwater on Saturday. The next meeting is set for Saturday August 14 in the Father Ellard Hall of St Mary’s Church, 63 Elgin St., Collingwood, from 10am-12.
Link to the County Strategic Plan
Jonathon Shore media 705-0812-0643