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A bright financial future for Oshawa

(Cartoon by George Longley)

Oshawa’s population is surging, outpacing the projections made in many of the city’s planning documents.

For that reason, among others, it is key for those in the big seats at city hall to be sure they keep the city’s books on the right path, as the demands on infrastructure and the need for services will only grow over the next 10 years.

As it stands, it would appear the city is steering a course in the right direction to improve tax rates in the city, while also maintaining the needed roads, bridges and services Oshawa citizens rely on.

Let’s look at the reserves.

Recently, the city’s external auditor picked through the city’s policies and procedures for contributing to these crucial accounts. What they found was quite encouraging as they are beginning to show signs of health.

Over the last four years, the city has been able to put nearly $20 million into these accounts and has also shown improvement in the amount of money they’ve been putting into them year over year.

And while they still lag behind in some areas when it comes to their source revenues as contributions to reserves, the city can be allowed some leeway to put a little more of this money toward its debts.

According to the 2017 BMA Municipal Study, Oshawa’s outstanding debt sits at about $548 per capita, which is in fact well below the Ontario average of $769 per capita. As well, between 2012 and 2016, the city was able to improve its debt to reserve ratio.

Along with that, over the last four years, the city has managed to pay down approximately $26 million in principle payments and reduce its internal debt by more than $10 million. At the same time, the city has managed approximately $105 million in infrastructure investments, a good thing too as the city continues to work against a multi-million infrastructure deficit.

With that said, the city still leans on its tax base for a large portion of its revenue, but looking ahead, that may soon start to change directions.

Over the next five years, the city will be paying off a number of large ticket items that have been on the books for some time, requiring substantial interest payments, including the $6.2 million internal debt bill for the Amazing Spaces project, which will be paid off at the end of 2018, and the bills for both the Centre Street Parkade and improvements to the Northview Community Centre, both of which will be gone in 2023.

A much brighter light can be seen in 2027, as a lot more breathing room is created with bills for the Legends Centre, most of the Tribute Communities Centre, UOIT, Oshawa Harbour and the Airport runway all being paid off.

Of course, there will be expenditures along the way, much like the $10 million purchase for LED lights which was added to the city’s internal debt load. However, a strict commissioner of finance and a new policy to manage debt appear to be steering the city’s ship in the right direction.