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No concealment or hiding of debt

September 26, 2013   ·   0 Comments

Dear editor:

Re: Times are Tough, why make them any tougher?

I am writing to correct misinformation included within Mr. McInnes’s letter published in the September 19, 2013 issue of The Times.

The submission made to the Province by the Simcoe County Primary Urban Settlement Areas and discussed at a meeting hosted by the Premier and Minister of Municipal Affairs and Housing requests the Province to consider debt incurred by municipalities for growth-related infrastructure and paid for from development charges to be calculated separately from the debt arising from maintenance and replacement of existing infrastructure which is funded from sources other than development charges.

Debt arises from two sources, new growth and existing needs. Currently municipal debt limits are calculated based only on funding sources that do not include development charges even though all growth related debt is paid for only with development charges. The suggested change is simply to use the funding source that will pay the debt to calculate the limit of debt that can be incurred.

Mr. McInnes comments re “credit notes” are also incorrect. The Development Charges Act provides that there are two ways for growth related capital work to be done. Either the developer does the work, in which case the developer receives a credit on the amount they would normally have to pay for their development up to the amount of the development charge funded project they have undertaken OR the Town does the work and the developer pays the development charges to the Town that are applicable to their development. This means the developer either does the work or pays the Town to do the work. The Act also provides the Town with the authority to borrow additional funds to do growth related work and all payments including interest are fully paid by development charges to be collected in the future. Under no circumstances are the existing taxpayers ever required to pay for growth related debt.

The suggestion that there is any concealment or hiding of debt is completely opposite to the facts. The true facts are that by separating the debt into the two funding categories, it will be very clear what debt has been incurred for growth and paid by developers through their development charges and what debt is incurred to maintain and replace existing Town assets, which is funded from all other available sources other than development charges.

Mayor Mike MacEachern

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