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Local Budgets
#16
I came across the following statements in the City of Kitchener capital budget and was very surprised by them (page 3):

Highlight #1 – The capital budget is balanced.
The capital budget is financially balanced, which means there is adequate funding for all projects included in the capital budget. This is a significant achievement, as it means the forecast is not just a wish-list of future projects, but an actual plan of what will be achieved in the future.


Highlight #2 – The capital budget reduces the City’s debt.
No additional new debt will be issued in 2018 over and above what’s previously been identified in the capital budget. Continuing to follow a disciplined approach to debt will see the City’s projected debt levels fall from $78M at the end of 2017 to $71M at the end of 2018, and a further decrease to $28M by 2027. 



Given where some municipalities are these days financially I think the people of Kitchener should be very pleased at how well positioned Kitchener is to essentially chart it's own destiny in the future and make the community what it wants to be rather than being subject to other limitations and whims. It should also help to make the region a more competitive place and liveable place not just locally, provincially, and nationally, but globally.
Everyone move to the back of the bus and we all get home faster.
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#17
Two thumbs up!
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#18
(11-26-2017, 09:51 PM)Pheidippides Wrote: Given where some municipalities are these days financially I think the people of Kitchener should be very pleased at how well positioned Kitchener is to essentially chart it's own destiny in the future and make the community what it wants to be rather than being subject to other limitations and whims. It should also help to make the region a more competitive place and liveable place not just locally, provincially, and nationally, but globally.

One would think so.
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#19
All that room for future borrowing! Wink
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#20
Part of my surprise was that City was not borrowing when rates are historically low and only going up from here (eventually, ..., maybe,..., no one knows)
Everyone move to the back of the bus and we all get home faster.
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#21
I see this argument a lot- "we are taking advantage of today's low rates." But the rates will go up. Some debt will have terms of thirty or forty years, but not all of it. And I wonder whether the financing is being spent wisely when so much of the argument is about current rates?

A lot of people don't have a good sense I think about the shape of their municipality's finances. I spoke a while back with an acquaintance of mine who is in a line of work where she ought to know about these things; we were talking about Waterloo/Kitchener amalgamation, and she said that Waterlooers did not "want to take on all of Kitchener's debt."

She was under the impression that Kitchener has vastly more debt than Waterloo. On a per capita basis, it's less. And, here we go, it's actually being paid off. That's not so usual around here.
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#22
(11-27-2017, 08:25 AM)MidTowner Wrote: She was under the impression that Kitchener has vastly more debt than Waterloo. On a per capita basis, it's less. And, here we go, it's actually being paid off. That's not so usual around here.

Waterloo has only $16M of long-term debt -- but that excludes $48M for RIM Park, which carries a rather high 7.5% interest rate, too. The overall per capita debt burden is arguably significantly higher than that of Kitchener.
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#23
I would wonder about the part of the line that reads "over and above what’s previously been identified in the capital budget."  As well, are there things that have been overlooked or deferred in the capital budget that shouldn't be?

For instance, have they planned for the full life-time cycle of the existing infrastructure? Or is there an infrastructure deficit that is being ignored?  I spent some time reading the report before stopping.  I'm willing to be corrected.

I did find a staff report from 2013 that suggested that once the debt was cleared in 2023, that a reserve would be built up ready to tackle infrastructure lifecycle costs after 2050.

There was also a tiny note about a future "Innovation District Parking Garage" circa 2026 in the 2017 report.
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