Officially wrapping up fiscal 2016, Wellesley got a clean bill of health for its finances courtesy of an auditor’s report presented to council Tuesday night.
Accountant Peter Graham of the Graham Matthew Professional Corporation has been auditing the township for nearly a decade, and this year was his last year on the job. He shared some of the highlights from the township’s annual financial check-up, emphasizing that the books were good, and the township was in a great place financially.
“The audit went better this year than it has ever gone in the past, without a doubt and I am not just saying that. The staff here are well qualified, they are experienced, they are hard-working and they really took the bull by the horns this year,” he said. “In our opinion, the financial statements present fairly.Wellesley has always been a strong municipality. The smaller the municipality, the stronger they are. They keep a better handle on the purse strings.”
There were significant increases on the investments of councils past, with the township’s ownership stake in Waterloo North Hydro paying large dividends.
“Since 2008, the increase on the investment in the hydro, and this is over and above dividends, has gone up about $4.3 million in that period. Hang on to that one,” said Graham. “This year, the increase was about $364,000, that was net of the dividends. The actual increase in the value was almost $600,000, with dividends of $232,000, so a net increase of $364,000. This is a record for Wellesley. The increase was a record and the dividend was a record. It is a great return. The rate of return is about 8.85 per cent and I don’t know where you would get that anywhere else.”
Interest rates and debt levels were a highlight for Graham, as well.
“Last year, you paid off your geothermal debt with hydro for about $51,000, which is a good thing. You took on some new debt for the recreation land purchase, which is a great reason for borrowing,” he told councillors and staff. “Because of the region’s AAA credit rating the first year’s interest on that is only 1.15 per cent. I don’t know where else you can borrow money at 1.15 per cent. That is good money to borrow. It’s a scale up type of debenture, but that first year is great. In addition to paying off the geothermal note, you paid off another $86,000 in principal on just regular debt.”
There is plenty of wiggle room for the municipality. In both borrowing and debt payments, Wellesley is well under the limits set by the province.
“What you are paying is nowhere near the limit for what you could be paying,” he said. “You are well below that.”
Graham emphasized the importance of the five-year financial review included in the auditor’s report, suggesting councillors and staff take a look.
“In this statement, you will see that a five-year financial review has been added, it was added last year, and it has a lot of important information on revenue streams, your expenditures, growth and assessment, number of households, population and so on. It is really good. It is a worthwhile statement that is really good at showing trends. If you haven’t looked at it yet, then I recommend doing so and we have added more information than ever,” he said. “Next year will be expanded even further.”