The numbers are in and Bradford is replenishing reserves while also dealing with its debt.
During the regular meeting of council last week, Sue Bragg, representative from auditor Baker Tilley, made a presentation about the town’s 2022 financial statement and results as of Dec. 31, 2022. Later, staff presented council with a report on the same results, showing the town ran a tax-levy surplus last year of $920,490, of which council transferred $33,692 to the general fund and $886,798 to the reserve fund.
After user charges, government transfers and reserve transfers, the town’s operating revenue for 2022 was $71,752,850, while the town’s operating expenses were $78,005,943, which should have left a shortfall of $6,253,093, but additional revenue from cost recoveries and other government transfers provided an additional $25,239,226, leaving the town with an annual surplus of $18,986,133.
While the town started 2022 with a cash position of $35,108,273, last year saw a significant decrease, mainly due to repayment of developer advances and long-term debt, which left the town with just $9,744,738 at the end of the year, of which $8,731,682 went directly into reserve funds, leaving $1,013,056 remaining.
The town increased reserves and reserve funds by $8,994,341 in 2022.
“This is really where Bradford shines,” Bragg said. “Despite the investments that have been made in infrastructure, Bradford West Gwillimbury has continued to put money away in reserves. Despite the huge growth you’ve seen in the community and the necessary investment you needed to make in infrastructure, you didn’t forget about putting money away in reserves and reserve funds.”
Later in the meeting, Ward 2 Coun. Jonathan Scott tried to pump up reserves even more and asked Ian Goodfellow, director of finance and treasurer, if council could also allocate funds from the sale of surplus lands which were acquired on Holland Street West for widening, but which were no longer needed.
The funds are “probably a little bit north of $1 million ... My recommendation would be to put it into reserves ... I believe the reserve which is most under stress is the town’s capital replacement reserve,” Goodfellow said.
Scott tabled an amendment to add the funds to that reserve, but other councillors were hesitant.
Despite praising the idea, Ward 4 Coun. Joseph Giordano wanted to wait.
“Whether it’s a small amount of money or a large amount of money, I’d like to have a little more time to maybe ask some more questions, look at some potential options,” he said.
Scott suggested it was better to deal with the funds sooner rather than later.
“At budget time earlier this year we had talked about how we had some pending asset sales and how dealing with the capital replacement reserve would be a good use for those funds, so I’m seeing this very much as housekeeping,” he said.
While Mayor James Leduc said he understood Scott’s intention, he suggested it would be more beneficial to have Goodfellow report back to council at their Aug. 1 meeting so councillors could “get a better feel” for the issue.
Scott pushed further still.
“What’s complicated about this?” he asked.
Tensions rose momentarily.
“We all have email, we all have access to this stuff, maybe not bamboozle us in front of council with this. I would appreciate some time,” Giordano replied.
Sandhu tried to temper the proceedings.
“Whether we do it tonight or do it four weeks from now, we know what the intention is. It’s understood around the table where we want it to go, but I want to see all the numbers and the facts,” he said.
Scott agreed to withdraw his amendment.
“If it makes people more comfortable to wait four weeks, let’s wait four weeks,” he said.
Looking at the numbers
There was still more good financial news from the presentation earlier.
While total debt increased slightly from $76,867,115 at the end of 2021 to $79,026,593 at the end of 2022, the percentage of the town’s debt compared to revenue was down from 117 per cent at the end of 2021 to 110 per cent at the end of 2022.
This is partially the result of increased revenue, but the town also paid off $28,737,834 of debt in 2022, including $16,712,825 in developer advances and $12,025,009 of long-term liabilities.
“We’re actually in good shape because ... we’re now on basically the down side of investing in our infrastructure and making sure that we recover that, because we are at $127 million deficit in (development charges) when it comes to getting paid back for those. That will come,” Leduc said after the presentation.
According to Bragg, the town’s linear tangible capital assets, such as roads, sewers, water pipes etc., still have about 72 per cent of their usable life remaining.
Goodfellow noted the town entered into three development-charge deferral agreements and approximately $3.45 million will be collected in the future as a result.
He said the balance of the overdrawn development charges will be collected from future development applications and building permits.
For 2022, revenue was up $4,411,356 and expenses were down $4,747,069 compared to expectations.
While the town brought in $81,651,463 in tax revenue, $22,789,644 went to the County of Simcoe and $16,761,670 went to the school boards, leaving the town with $42,100,149 in net tax revenue, up about $3.3 million from the year before.
Bragg attributed this increase to the town’s growth.
User charges also increased about $3 million due to growth and water and wastewater chargers were up about $1 million.
This meant that property taxes made up 58.7 per cent of revenues while user charges made up 28.6 per cent.
The amortization costs were up from $17.7 million in 2021 to $19.7 million in 2022, which the auditor attributed to the increased use of programs and services post-pandemic.
“We certainly had a lot more of our parks and recreation programs up and running and obviously needed staff to look after those,” Bragg said.
A breakdown of expenses by department as a percentage shows protection services as the largest at 27.8 per cent and planning and development as the smallest at 2.9 per cent.
A breakdown of expenses by segment shows salaries and benefits as the largest at 43.7 per cent and debt interest charges as the smallest at 2.1 per cent.
Staff also presented council with a report detailing the operating and capital budgets from Jan. 1 to April 30, 2023, which was received for information without recommendation for action from council.
The report says the results indicate an annual surplus of $3,763,561, but that $3.5 million of that is the result of the difference in how taxation revenues have been budgeted compared to how they have been recorded as revenue.
The report explains that about 50 per cent of the taxation revenues for the year have already been accounted for and there are no areas of concern at this point regarding the general tax levy, water and waste water, or 2023 annual capital projects and the results as of April 30 “appear to be on or below established budgets.”
