By Staff
November 14th, 2024
BURLINGTON, ON
Everyone borrows. Your mortgage is borrowed money.
The Region of HAlton does all the debenture borrowing for the municipalities.
Next week council will endorse the 2025 Capital Budget for the City of $103,525,163 with a debenture requirement of $8,950,000, and the 2026-2034 capital forecast with a gross amount of $994,403,942 with a debenture requirement of $30,179,850 as outlined in the 2025 Budget Overview and as amended by Council.
Borrowing funds now moves the cost of what is being built now to future taxpayers.
The debenture in the amount of $8,950,000 in 2025 is a tax-supported debt.
The practice for the Halton Region is for all four municipalities to send their debenture needs to the Region who then go to the capital markets to raise the needed funds. The Region has a top level credit and bond rating which results in lower borrowing costs.
The Regional Chair issues a report every year on just how strong the credit and bond rating is.
Page 261 of the proposed 2025 Burlington budget shows debt charges increasing by 7.3% over 2024, how is this possible when interest rates are declining?
Well, my dear action group, it all depends on who is lending the $$ and under what conditions. If you have a defecit with Visa you’d be quite happy with inly 7.3% I think. COB’s rate of borrowing will also depend on their rating and, as I understand it, this has worsened somewhat as a result of the depleted state of the reserves.
Editor’s note. The City of Burlington doesn’t have a credit rating related to any borrowing they do. The Region does all the borrowing on behalf of the municipalities in the Region – and they have a triple A rating.
I stand corrected. It was an assessment of the City’s economic health that I was referencing and I assumed (yeah I know) that that would impact its credit. My point still stands, however. Good to know that the Editor is diligent in his corrections of ‘local voice’. Now, how do we return the favour?
Editor’s note: Scotch has always been looked upon favourably.