Some talk recently about the City’s debt. True that we have had to borrow recently to build (among other things) the new clean water plan, the expansion to the pollution control plant, and the Holly Recreation Centre. Here’s a message I recently sent to someone who was asking about the City’s debt:
The easiest way to think about this is like a mortgage on your house. Almost nobody has enough cash to buy a house outright, so you take out a mortgage. The City is no different – we don’t have hundreds of millions of dollars in the bank to use when we need to build a new building, so we essentially take out a mortgage. The key question in making this decision – just like with your home budget – is how much of a burden the mortgage payments are. Can you make your mortgage payments, and pay for everything else you need in life, without running into any kind of financial trouble, based on your income.
In 2010, our debt payments were 4% of annual revenue. This is the equivalent of someone who makes $40,000 a year having mortgage payments of $1600 per year. Obviously, that’s a very low level of borrowing costs relative to income.
But – Barrie does have to take out a bigger mortgage over the coming years, because we don’t have the cash to build the clean water plant or the pollution control plant. However, one of the reasons our credit rating has stayed consistent despite the extra debt is because not only is our current debt relatively low, but Standard and Poor’s feel that our revenues are also likely to increase in the coming years due to economic growth (the new TD operations centre is a good example). So while our debt costs are increasing, they’re very low to begin with, and the analysts believe we will have more income to cover increased debt charges in the future.
Overall, however, I think Barrie does need to reduce some areas of capital spending. While we actually need to spend more than we have been on fixing roads and pipes, we need to take a very hard look at other projects to ensure we’re making fiscally responsible decisions. This year, the draft capital budget calls for a fairly dramatic reduction in spending and I think that’s appropriate given the level of spending over the past few years, associated in part with the economic stimulus projects.
On Monday night, Council approved my request to start overhauling Barrie’s transit system. Read more on this by clicking here.
I’ll post more as things move along. But the short version is that I think we’ve outgrown our current model, and we need an all-new system.
Since we started running buses decades ago, Barrie has had a transit system based on a single downtown hub. Barrie has now outgrown this system, and we need to look at new models that can allow more frequent and more convenient service to all parts of the City.
Developing a new model for transit will take time and extensive public consultation. It will likely involve some changes to our bus fleet, which will also take time – ultimately, it is likely to be 2 years or more before we change over to a new system – if that is the direction Council chooses, and if the extensive planning process determines is desirable.
At the same time, there is also discussion of where intercity buses could operate from. The return of GO rail to Barrie has changed commuting patterns and reduced demand for Barrie-Toronto bus service; there are other changes in service that may also present opportunities to shift intercity bus service to new locations. Again, at this point this is just an idea – a lot of talking and a lot of planning would be required before any changes are made, and all of this has to be in close consultation with the service providers.
If a new model were to be developed that no longer requires a significant hub at the transit terminal (for example, a multi-hub model), it’s possible we will no longer need all of the ground floor of the building for transit related uses. IF the changes to the bus system proceed, there exists the potential for the ground floor of the Terminal to become a market building, with full-time vendors, open all week.
The conversion of the building is a potential outcome of the changes to Barrie’s transit system, which itself would occur only after extensive planning and consultation with all affected groups and with the public. That’s the next step – start talking with everyone in and around the transit system and the bus business – about a new model for the future.
Everything about this is big…
TD Bank Group to open new Technology and Operations centre in Barrie, Ontario
TORONTO, February 11, 2011 – TD Bank Group today announced plans to build an 180,000 square foot Technology and Operations centre in Barrie, Ontario. Building construction is scheduled to begin in March 2011, with completion expected by late 2012.
“Barrie is a dynamic city that offers the perfect mix of location, accessible technology and future growth for us to invest in,” says Kevin Kessinger, CIO and Executive Vice President, Shared Services, TD Bank Group. “This is the ideal space for us to build our unique, state-of-the-art facility, and we look forward to its creation over the next three years.”
The new centre will be LEED Gold certified and situated on a 40 acre property.
“This is great news for Barrie. I’m extremely pleased that one of Canada’s leading financial institutions is demonstrating its confidence in the City of Barrie’s economy by investing in our City,” said Mayor Lehman. “Not only has TD been a part of our community for many generations, but they continue to contribute and lead by example in many ways. The new technology and operations centre is designed to meet the guidelines of the Canadian Green Building Council’s LEED program and is a significant addition to our growing financial services sector. We hold TD in high regard as a business partner in our City and look forward to working with them as they continue to grow.”
Details on the zoning information are available from the Ryan Windle of the City of Barrie, Planning Department, 705-739-4220, ext. 4324 firstname.lastname@example.org
Laura Mergelas, Corporate and Public Affairs, TD Bank Group, 416-983-1514, email@example.com
I agree with Craig Stevens, BIA Director, when he says Winterfest is maybe the best excuse to get outside in the middle of the winter. Now one of Ontario’s Top 100 festivals. Tomorrow’s weather looks great, -3 and partly cloudy…more information on Winterfest can be found here. Tons to do, great for families. Cassie and Jenn and I will be at the Library in the morning then out and about in the afternoon.