NIPAWIN — Nipawin is at its lowest point of debt in the last 10 years, according to a report presented to that town’s council
Barry Elliott, Nipawin’s administrator, brought the report to council’s attention during the May 11 council meeting. Rennie Harper, Nipawin’s mayor, said seeing that their savings and debt reduction plans have been working the way they wanted them to is quite exciting.
The town credits its level of debt due to a strong financial strategy and prior planning.
Lesley Richer, the town’s finance director, said council knew a new water treatment plant would cost the town millions to build so an increase in utilities with additional funds going into the capital utility reserves helped the city prepare for the cost.
Being financially conservative with the town’s reserves also ensured that the money was available and will be available for future capital projects, Richer said. For funding the water treatment plant, the town was also fortunate to receive additional funding from the provincial and federal governments, she said, but they were ready to pay their share when the time came.
While reserves have taken a hit, council has also approved investments into their 10-year machinery fund and capital trust fund reserves, both of which are at their highest points in the last 10 years of saving. This puts the town in a good fiscal position, Harper said.
“It's actually a way to be able to use that money that you invested, to be able to think about future savings and planning for those future expenditures so that you don't have to borrow at the last minute.”
Increases to capital debt over the last 10 years has meant funding for the swimming pool, a new fire truck, and the Coventry Crescent subdivision but now, increases to the gas tax in 2019 and other smart financial decisions has meant the town has been able to pay down that debt, Richer said.
Looking to the future for projects that need to be done, it takes forethought to have the reserves ready for use, Harper said. Moving towards this model of saving took a change in thinking from one council to the next.
“We've been trying to build our reserves and get ourselves ready before we actually have to spend the money. And I think if it means that you have to do a little bit more forethought, and you can't just spend it as the whim hits you. You have to use your capital asset management plan.”
There is always going to be a place for long term debt but councils have to use it wisely so there is room to borrow when needed, she said.
With the council just tabling the report at the beginning of the month, Harper said they have not assessed what this will do to taxes in Nipawin. She is hopeful that residents see this report as the town being fiscally responsible.
Now with COVID-19 closing many city buildings and programs, Harper said things have changed but the numbers can be a bit misleading. The town has lost $198,000 in revenue, however, they do not have the same expenses they would if their facilities were open. Harper said this has meant a net savings of $198,000 instead of a net loss.
Seeing this amount of loss at the civic level is also a sign that community programs are heavily supported and subsidized, Elliott said.