At the DBIA Breakfast Network at Empress Gardens this morning (June 19th), Mayor Bennett delivered the following remarks...
I come this morning wearing two hats.
As a businessman,
Our operation on Simcoe Street
Has been a supporter of the DBIA for a number of years,
And I appreciate all your good work
In helping to protect and grow the downtown.
As the Mayor,
This is actually the first time
That I have had the opportunity
To speak at a DBIA Breakfast Network meeting.
I want to thank you for your invitation,
And suggest to you that,
If there is value in a more frequent pattern of conversation,
I would be happy to be part of it.
Mr. Raino was very generous
In permitting me some leeway in selecting my topic today.
In recent times,
I have spoken about my Mid Term Report...
In which 86.6 per cent of my 45 election proposals
Had been either achieved or substantially achieved
By City Council...
At the half way point in our four-year term.
I have spoken recently about the Provincial proposal
For a new casino in the City,
And the need to approach that debate
With both reason and caution.
And many of you will know
That I spoke earlier this year
On the economic health of the downtown,
And the substantial investment that the City is making...
And will continue to make...
In its support.
Of course, none of these things
Exist in isolation,
And all of them are dependent for their success...
In one way or another...
On the availability of public sector funding...
Which, in turn,
Speaks to the state of the City’s financial well being.
And that is the topic I want to discuss with you today.
By way of context,
There is no doubt that jurisdictions around the world
Are facing very difficult financial challenges these days.
Just look at the frequency of countries defaulting on their debts, or having to restructure them...
The recent European austerity measures and bank bailouts...
The US Debt Ceiling...
The US Fiscal Cliff...
And the financial instability associated with the Arab Spring movement.
Of course, municipal governments are not exempt.
Just two months ago,
Stockton, California ... a city of 300,000 people...
Was entered into bankruptcy.
In our own province,
We have some legitimate concerns.
Servicing the debt
Is now the third-largest expenditure in the Ontario budget...
And Ontario’s debt is increasing at a rate
That is more than twice that
Of the Ministry of Health and Long Term Care.
People are understandably concerned
About the state of public sector finances,
As they should be.
The question this morning
Is whether they should be concerned
About the state of finances
In the City of Peterborough...
Or concerned about
Our financial capacity to both manage our current needs,
And meet our future needs.
This is a question that I am asked frequently,
And one in which I take a personal interest.
I ran on a platform
That included managerial leadership and financial efficiency,
And I want to answer that question for you today.
And I will start by telling you that the budget
For my own Office next year
Will be held to a zero per cent increase.
There are five performance measures that I will quickly cover.
First, consider the City’s credit rating...
That is, the evaluation given by credit agencies
Of our credit worthiness...
An evaluation that serves as an indicator to the investment community
Of our financial security and trustworthiness.
Standard & Poor’s credit rating
For the City of Peterborough at the end of 2012
A very positive rating
That we have earned consistently since 2008.
This is very good news
And a financial status that we can be proud of.
In assigning this rating,
Standard and Poor’s
Made two key comments about our finances
That I want to share with you.
First, the City has consistently posted strong budgetary performances,
Because our operating balances
Have averaged nearly 17 per cent of our operating revenues
Over the past five years.
This means that our yearly balances
Are consistently strong and robust.
And second, the City’s free cash and liquid assets
Were about $113 million at the end of 2012,
Or more than eight times our estimated debt service for 2013.
This means that we have a very strong liquidity level.
Again ... an accomplishment in which we can take pride.
A second measure to consider
Is residential property tax increases.
We have been deliberate
In keeping these increases
At modest levels,
In order to help keep costs down for Peterborough families.
For most home owners,
We are judged on the basis
Of our all inclusive property tax increases,
And how they impact real people with real pocket books.
Our annual residential increases so far this term
Have all been at or below 3 per cent...
Including last year,
When we added a special 1 per cent increase
To help fund much needed capital investments.
This is a responsible course
That is supportive of all taxpayers...
That is intended to maintain our services to them
Without being a burden on them...
And a course that we will continue for the entire term.
Third, we have made a conscious choice
To invest in our long term future.
It is tempting for some
To put off the hard spending decisions
About future investments
In favour of spending
That has immediate and visible results for voters today...
Because that can be a popular way to govern.
Short term gain...
Long term pain.
It is not my way.
In order to renew our infrastructure
For the benefit of future generations,
We have invested in a wide variety
Of important capital improvements.
Not all of them are visible,
But all of them are essential for our long term health as a City.
In fact, there are 240 capital projects
In the 2013 capital budget,
Representing an investment of almost $63 Million.
Airport expansion and improvements, including the Seneca College building;
Major waste water management projects;
The new police radio system;
The new fire station;
The CPR bridge;
Market Hall Improvements;
And a large number of road improvements.
Many of these are in the downtown,
And all of them help strengthen a City that cares about its downtown.
Fourth, we have been very careful
In managing the level of our capital debt.
Our capital debt this year, both issued and approved,
Is just under $135 million...
A number that includes the debt of both
The Peterborough Utilities Commission,
And the Fairhaven Long Term Care Home.
The City’s Net Financial Assets Ratio...
A measure of the extent to which
Liabilities can be met from operating revenues...
Has been very consistent
Over the last three years of its calculation.
In fact, according to standards set out in provincial legislation,
The City is using less than half of its debt capacity.
If we wanted to,
We could issue an additional $200 million of debt
For a ten-year term,
And still be within the limit imposed by the Province.
In fact, even with a debt limit we have set for ourselves...
That being a limit of 15 percent of our “own source” revenues,
We are still using only 75 per cent of our debt capacity.
The bottom line is that the City’s debt situation
Has been managed responsibly and with caution.
The cost of our debt servicing is easily manageable...
The City is well positioned to carry additional debt...
And we are living well within our means.
Finally, I do want to say
That the debt picture of the Province of Ontario,
Which I touched on earlier...
Is an important part of our own financial picture.
And the reason is simple.
Increased provincial dollars
Spent on servicing a provincial debt
Mean fewer provincial dollars
Spent on other expenditures,
Interest on the Provincial debt
Is projected to cost Ontario taxpayers
$10.6 Billion in 2013–14...
An amount equal to 8.3 per cent
Of the total provincial budget.
And we all understand
That those dollars could be put to very good use in our city...
Which has, like other cities in Ontario,
Become a repository for a number of failed policies
Of the provincial and federal governments.
So here’s the message.
The City of Peterborough is in excellent financial shape.
Our credit rating is positive and stable.
Our residential property tax increases
Have been held to modest levels.
We have wisely invested not only in our present,
But in our future.
Our debt situation is responsible and manageable.
And we look to the Province to manage its own debt
In ways that will ultimately free more dollars
For Ontario cities and regions like our own,
Who are the real engines of Ontario’s growth.
I admire, respect and share
In the determination of the DBIA membership
To bring economic investment, development and renewal
To the downtown.
An essential bedrock of that good work...
For which there is no substitute...
Is a solid record of well managed municipal finances.
That is exactly what we have set out to achieve,
And we all have reason to be proud of the work
Of our City Council and our City staff
In making it happen,
And in our collective accomplishments to date.
[Speech sent to us by David Goyette in Mayor's Office.]