CORNWALL – The seriousness of Cornwall’s financial future was palpable with some sobering, serious words from the city’s mayor.
“(We’re in) real serious financial difficulty,” Leslie O’Shaughnessy told fellow councillors at a budget committee meeting Friday afternoon.
The mayor says the municipality of nearly 47,000 people has “definitely” got financial problems and, as it stands now, the financial map is “not sustainable” long term.
The mayor theorized the city is probably back to where it was financially prior to the $68 million sale of Cornwall Electric in 1998.
All but $25 million of those dollars went to fish the municipality out of debt while the $25 million became the Progress Fund – a financial nest egg which generates about $1 million interest each year to pay for various city projects.
Cornwall had been out of debt in 2009 but chose to borrow millions of dollars to cover the cost of the Benson Center, the ambulance headquarters on Campbell Street and an addition to the aquatic center.
“We are the highest taxed per capita and $100 more on a tax bill…the harder we make it for them (the public) the harder it is for our community,” O’Shaughnessy said, referring to the 5.58 per cent proposed budget increase or an extra $83 a year on a $164,000 property.
“There is probably a bigger one (tax increase) next year. We are non-sustainable in the long term…another five per cent, another five per cent. At some point we have to say we can’t do it anymore,” the mayor said.
City CFO Maureen Adams defended the low-cost borrowing in 2009 saying the city had an opportunity to capture two-thirds funding from senior levels of government.
“We would not have been able to build those facilities,” said Adams.
She added other communities that turned down the funding at the time has turned out to be a “loss for some of those communities” as the province, facing its own mounting debt problems, isn’t giving out matching stimulus funding anymore.
The city’s chief bookkeeper also added, while property taxes versus household income are high, the average taxes per property compared to similar properties in other centers is lower.
Coun. Elaine MacDonald suggested the tax increases should not be seen as oppressing the public but “giving them something (a service) we couldn’t afford.”
Coun. Mark MacDonald says “somebody has to come up with an idea to raise $15 to $20 million,” and floated the idea of selling municipal buildings such as the Justice Building on Pitt Street.
Cornwall will look at its long term debt problems on Friday next week.