By Dylan O’Hagan [1]
BELLEVILLE – Brian Cousins, director of finance for Belleville, has a message for city council: too much debt will definitely affect the city’s operating budget for years to come.
Council’s plan is to borrow $38 million in 2015 and $114 million over the next 2-3 years. The money will be used to complete some costly capital projects such as Build Belleville [2].
Cousins said this could put added pressure on future councils who will be responsible to pay off the debt.
[3]Brian Cousins, Belleville’s director of finance, says the city has a good credit rating but too much debt is worrisome. (Photo from hastingshistory.ca)
“When you finance a project, it’s like taking out a mortgage or a loan. You have to repay it back and you have to repay the principle and the interest amount back, basically out of your pocket. That’s one way we have to repay the loan, to basically take it out of your pocket, which is the operating budget,” he said.
Belleville’s budget has already been allocated for projects around the city. This leaves Belleville council with the option to take on debt to complete the projects.
Cousins said that Belleville won’t have a problem securing a loan because it has a good credit rating. The city received a double A minus rating in April by Standard & Poors [4], an independent financial service company that provides long term credit ratings for many municipalities.
The ratings go from triple A plus all the way to D. The rating is created through eight criteria, including institutional framework, the city’s economy, financial management and debt burden. Other factors include the region, businesses, industry and how the city’s population is changing.
Cousins added that comparatively, the government of Canada would receive a triple A rating, but no municipality could ever achieve that credit standing. A double A minus rating and a stable outlook is good for Belleville, he said.
“Its a long term rating so that if anybody wants to buy our debt, it opens up the market for us,” he said.
Cousins added that he believes $114 million to be a significant debt. He said he hopes that the citizens of Ontario and Belleville are aware of the council’s ambitious plans.
Take a listen to part of the interview with Brian Cousins.
http://www.qnetnews.ca/wp-content/uploads/2015/09/brian-coyusins-print-clip.mp3 [5]