Previous council's spendthrift tendencies firmly curtailed in series of budgets
The Town of Pelham’s annual financial report for 2021 was released at the latest council meeting, Monday, July 25.
“The report is a great snapshot of the dramatic and profound changes across both the community and the municipal corporation,” said Chief Administrative Officer David Cribbs in an email to the Voice. “There’s more money in reserves, there has been a lot of new construction (both repairs to infrastructure, new home construction and new businesses) and the Town continues to modernize its bylaws and corporate policies.”
Highlights of the annual report include an increase in Town assets of $4.9 million and a decrease in liabilities amounting to $1.5 million. This resulted in a significant reduction in Pelham’s debt, from $18.5 million at the end of 2020 to $12.1 million to begin the current fiscal year. As explained in the report, this is largely the result of increased transfers to reserves, restraint in taking on new debt, and some delays in capital projects.
“The key thing here that the people of Pelham were concerned with was our net debt,” says Pelham’s Director of Corporate Services and Treasurer, Teresa Quinlin-Murphy. “A few years ago it was a very large number. As we are paying down the debt, that number is decreasing which is very good for the Town.”
Looking at the five -ear trend beginning in 2017, 2018 stands out as a significantly challenging year for Pelham, with assets falling to $15.3 million and liabilities soaring to $56.8 million, leaving a net debt of $41.5 million that year. Since 2018—particularly following the election of a new Town Council—all three of these categories have trended in the right direction.
As well, the report shows an increase in the Town’s reserve fund of $3.8 million by the end of the 2021 fiscal year. Quinlin-Murphy points to this as another positive outcome of 2021.
“There’s a couple reasons for that,” she says. “One is that we’ve been intentionally putting more money into the reserves, as our reserves have not been at the level that they should be. We’ve had to increase it slowly so as not to place the burden on the tax levy. There were also some capital projects that were approved to be paid out of reserves, but they have been delayed or haven’t started yet. Those projects will either happen in 2022 or 2023.”
Building permits were up for 2021, at 401 issued for the year and 124 development applications received, representing some $179 million in new construction.
“That’s higher than in 2020,” says Quinlin-Murphy. “Don’t forget, 2020 was the start of Covid. For a few months we weren’t allowed to issue any permits. Last year there were a lot more building permits. We saw an increase in the development charges revenue that went into the reserves. Part of that increase has to do with the backlog of building permits because of Covid.”
We saw an increase in the development charges revenue that went into the reserves
Another factor leading to the positive results for 2021 was the Town’s success in applying for grants. The report states that Pelham made some 23 grant applications and carried over $0.6 million in Phase 2 Covid-19 funding in addition to receiving another $0.3 million in 2021 Covid-19 Recovery Funding, for a total of $1 million dollars to offset Covid-19 operating pressures last year.
“The Town did really well with grant applications,” Quinlin-Murphy adds. “All of our Covid expenses have been funded by grants from the province, so it hasn’t affected the Town at all. We ran 66 vaccination clinics at the Meridian Community Centre and those were all reimbursed as well.”
The Treasurer goes on to point out how well the Town did in modernizing the delivery of many of the services offered. Quinlin-Murphy says these changes, made possible by modernization grants, have made for a more efficient and effective experience for taxpayers.
“We’ve been able to look at some innovative initiatives,” she says. “We were able to combine the Lincoln and Pelham libraries, we’ve started using automation in corporate services, finding better efficiencies, we’ve begun using new software for human resources and web servies. These have been significant as far as improving processes through technology while not increasing staff.”
Grants represented a total of 12 percent of Pelham’s revenue for 2021, while property taxes were 43 percent. The report explains that property tax revenue was higher than budgeted because of supplemental taxation revenue, which is a result of growth in the Town, as well as additions, renovations and class changes that were not previously recorded on the assessment roll.
Though total revenue was down 7.1 percent from 2020, and expenses increased by 4.6 percent, the Town ended the year with an annual surplus of $12,236,421.
Quinlin-Murphy says staff is currently in the process of developing next year’s budget. With inflation rate currently at just over 8 percent, Canada’s highest rate in about 40 years, there is likely to be some unexpected strain on both this year’s budget and that for 2023.
“We definitely are concerned,” she says. “The fuel cost has an impact. We see the effect of inflation on some of our capital projects. There have been a couple of reports that we’ve had to go to council with to receive additional funding for. We’ve seen some capital projects come in at 30 percent to 35 percent [higher] than what was budgeted, and one that was 50 percent higher. That will have a significant impact on the 2023 budget as far as the number of capital projects that we can do.”
When you have specialized vehicles like snow plows, and large vehicles that are customized, it creates a lot of pressure
Supply chain difficulties, a fact of life since the beginning of the pandemic, also may present some difficulties.
“You can’t get certain products,” laments Quinlin-Murphy. “With our fleet, you have to put in an order now to get it in two years because of the wait time. That’s been a big thing for us. When you have specialized vehicles like snow plows, and large vehicles that are customized, it creates a lot of pressure. It’s very challenging, and I am concerned about how it will affect the 2023 budget.”
In looking back on 2021, however, Quinlin-Murphy says the report as a whole is a positive one.
Mayor Marvin Junkin and CAO Cribbs, in their statement in the annual report, say, “The work completed in 2021 and the goals accomplished provide a sense of pride for all involved. Pelham successfully faced the challenges brought on by the pandemic and now continues to look to the future, focusing on enhancing the community that Pelham residents proudly call home.”
“As the report makes clear,” concluded Cribbs in his email to the Voice, “the trendline is a positive one across the board. Life is good in Pelham, and we are working well as a team to make it better.”
The full report is posted on the Town’s website, at https://www.pelham.ca/en/resources/news/2021-Annual-Financial-Report---Print-Version.pdf
