Despite the economic downturn, Wellesley’s finances are faring well these days.
Scratch that; perhaps because of the economic downturn, Wellesley is doing well.
The 2008 financial report for the township shows a $1.58-million increase in the overall surplus. That figure compares favourably with a 2007 figure of approximately $400,000, according to a report discussed by council Monday night.
“It was a good year. They’re in a really strong position. The financial position if you like, or the surplus, the retained earnings, went up approximately $1.58 million, so that’s always good,” explained Peter Graham of Graham Mathew Professional Corporation, the firm acting as the township’s auditor.
But those figures can be a little misleading, Graham went on to explain in an interview, noting that upper tier stimulus spending is at the core of the healthy surpluses. A number of grants from the federal and provincial governments remain in the coffers while the township lines up its capital projects for the year.
“It’s a bit of a two-edged sword, isn’t it? We’ve got all this money being dumped into the economy. Hopefully, it ends up stimulating it to the point we can repay everything. When I say we, I mean the federal and provincial governments are going into considerable debt to do this. Hopefully, it provides a stimulus that creates new business and new jobs and that of course produces taxes – we have to pay all this back at some point in time,” said Graham.
Chief administrative officer Susan Duke shared a similar view.
“We certainly have benefitted from the injection of both federal and provincial monies in 2008. The interesting part of it is, of course, we’re going to have to spend that money and so next year, the 2009 financial statement isn’t going to look quite so rosy because we won’t have that large influx of dollars from grant monies,” she noted, adding that to date this year, the township has received commitments from the upper tier governments for $1.27 million in infrastructure funding (Hessen Strasse, Weimar, Siegner Bridge projects), and has applied for a total of $3.15 million. Graham advised council to continue applying for grants and when possible to consider borrowing money now that interest rates are low.“It stimulates jobs and the money is cheap,” he explained.
Under current grant formulas, the federal, provincial and local governments each contribute a third of the cost of any approved projects.
“In a way it’s almost a no-brainer because you’re getting one dollar from the feds, one dollar from Ontario – two dollars from senior government to your one dollar – and it gives you three dollars to do infrastructure investment where you need it. That’s a good thing in the case of Wellesley and other municipalities,” said Graham.
