Berwick gets a look at 10-year ‘worst-case’ work list

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Kings County Register

The worst-case scenario shows Berwick in debt to the max until the 2030s. “But I wouldn’t be doing my job if I didn’t look at those numbers,” town financial officer Mike MacLean told councillors at the Feb. 24 committee-of-the-whole session.

MacLean spent half-an-hour reviewing the town’s 10-year capital improvement plan; while the town is only bound by 2009/ 2010 when it approves its budget, the five-year plan is required for federal gas tax funding and the 10-year look to 2018/ 2019 was set as a council priority a few years ago. “Under the current tax rates and projects we have, we run out of capital reserves in year six - it’s a puzzle that needs to be juggled. Difficult, but it doesn’t mean it can’t be done.”

MacLean’s numbers include big ticket-projects, such as $3.6 million in storm and sanitary sewer and sewage treatment plant work that, studies and engineers indicate, must be done within the next decade.

He didn’t include any potential funding from federal or provincial programs. “This allows council to see what the costs will be if we unable to obtain outside funding. It’s not something we can’t manage, but you haven’t taken on this much debt in such a short period of time before. “If you run the numbers out, the problem we’re talking about doesn’t disappear for 20 years.”

MacLean used a four line graph to show current tax revenues, what should, ideally, be going into capital reserves; the portion of taxes that will go towards debt payments over time and the impact capital projects will have on the operating budget.

He said he ran numbers dropping projects altogether - an $800,000 library and $950,000 pool at the future Apple Dome complex - “and it doesn’t solve it, either.”

There are options, MacLean said.

Financing sewer line and plant work over 20 years rather than 10 would help - and is acceptable, as the infrastructure’s extended life span will benefit future taxpayers still paying for it.

Lowering the contributions to a capital reserve would free up some room for debt allowances in annual revenues. “We can seriously chase grants and, where we can do it in taxes this year, I think we should. We said when we set the tax rate last year it would some back, and here it is coming. Council has lowered taxes to protect residents in the past, but now it’s a debt issue: no choice. “It’s hard to do, but what you do in the first year can make a big difference in the years to come.”

MacLean hopes to have a more detailed capital improvement plan by the March 24 council session, with the goal of May 12 approval.

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