Let’s talk about debt.

I want to do few “Let’s talk about” posts. My first one is on debt. It requires a few minutes, grab a coffee and read on. More “Let’s talk” posts will follow.

At two all candidate meetings, a candidate said that our debt has doubled two budgets in a row, and it needs to be looked into it.

Well, let’s take a look at it together.

The candidate is right, the debt has almost doubled two years in a row, here are the figures. (rounded for ease)

2024 long term debt $15 million
2025 long term debt: $27 million
2026 long term debt: $53 million

The debt was carefully planned, using the “legacy fund” to finance the Lamont Sport Park, $12 million, and the Aquatic and Wellness Centre, $50 million. With arena upgrades, new soccer fields, park renovations, we spent close to $70 million on recreation in the last 6 years. The debt for these projects were mostly incurred in 2024, 25, and 26.

The province regulates everything we do. The province gives us a maximum debt repayment based off of our income. We are currently at 37% of that maximum. We have a 63% cushion.

Yes, we made a planned generational investment into recreation. Not unlike a family buying a home. Having said that, we can’t over spend, we must live within our means.

I am a fiscal conservative and I have pushed reduced budgets increases every year. Last year we had an increase of only 0.9%. I am hoping to cap increases at the rate of inflation.

Going forward, we have a detailed 10 asset management plan to allow for things like a new fire hall, water tower, and ice pad. Much of it will be financed, and we could reach 47% of our debt load in 2036. When we get grants, it reduces our capital expenses.

Our debt has doubled, it was planning to meet the needs of our growing community.

Below you will see some summaries and links. I brought you the facts.

Debt payments:

• The Annual Repayment Limit (ARL) for a given year is set based on the revenues from two years prior.

• Total Baseline Annual Repayment Limit effective January 1, 2026 (based on 2024 revenue): $11,844,695

• Anticipated 2026 Debt Payments: $4,222,956 (35.7% of Total)

• Remaining Annual Repayment Limit for New Debt: $7,621,739 (64.3% of Total)

2026 Grants:

Staff has worked hard at applying for grants and over this term. I went to AMO, Association of Municipalities of Ontario, 4 years in a row to lobby for grants and funding. The hard work of staff and council has paid off. We received about $31 million from the Province and around $9 million from the federal government.

 

It includes:

• $2 million for growth readiness planning for Bruce C

• $3.2 million from the Housing Accelerator fund

• $1.9 from the municipal housing infrastructure fund

• $17 million for Housing enabling water systems, southampton waste water plant

• $1.3 million for highway 21 and Turner street intersection

• $3 million for resurfacing highway 21 in Southampton.

• Total grant money received $39.8 million

2026 Reserves:

• Waste water $6 mil

• Development charges $14.2 mil

• Roads $1 mil

• Total reserves of $32.4 million.

The Town has an accumulated surplus of about $226 million.

Debt details by the year.

2023
Town of Saugeen Shores held approximately $16.1 million in long-term debt, with annual interest payments on long-term debt totaling $506,161 (down from $568,761 in 2022)
Repayments: The town repaid $1,620,391 in long-term debt during the 2023 fiscal year.
Accumulated Surplus: The town's accumulated surplus increased by $13,300,688 to reach a total of $221,597,950 at the end of 2023.
Broader Borrowing Outlook: While 2023 figures sat around $16.1 million, municipal budget plans and subsequent projections noted that long-term debt obligations would rise significantly in subsequent years (such as for the Aquatic & Wellness Centre and other infrastructure projects)

2024
For the 2024 budget and capital planning cycle, the Town of Saugeen Shores projected planned debt financing of $24,400,773 specifically for the Pryde Aquatic and Wellness Centre (AWC) alongside $13,600,000 for water, wastewater, and landfill projects, contributing to major multi-year capital commitments.
Budget & Debt Projections for 2024
Aquatic and Wellness Centre (AWC): Required an estimated $24,400,773 in debt funding for 2024 out of a $42 million total project debt allocation.
Water, Wastewater, and Landfill: Involves over $60 million in cumulative debt planning, with roughly $13,600,000 slated for 2024-related works funded through rate increases.
Annual Repayment Limit (ARL): Town corporate services noted that we are about 25% of our ARL

2025
The Town of Saugeen Shores has approximately $53 million to $53.5 million in long-term debt.
Budget & Debt Projections for 2025
Total Long-Term Debt: Stands at about $53.5 million (with net financial debt around $28.5 million).
Aquatic Centre (AWC) Impact: Major borrowing increased due to the Pryde Aquatic and Wellness Centre, which added an extra $18 million in debt in 2025 for a total of $42 million tied to the project.
Water and Wastewater: Includes $26 million of debt assigned in 2025.
Provincial Limits: This debt load represents roughly 36% of the limit permitted by the Province of Ontario.
Repayment Guardrails: The town maintains a self-imposed 75% debt-repayment policy guardrail to manage long-term obligations.

You can review actual and further financial details through the Town of Saugeen Shores Budget and Finance portal.

Experienced leadership understands finances. I have the experience, the leadership, and a proven track record.

Thanks for taking the time to read.

-Bud