Investing in Our Community
By strategically utilizing new growth revenue in combination with low cost, long-term debt financing, our Town is leveraging our population and development growth in a way that is positive, sustainable and responsive to the changing and diverse needs of our community.
Since 2010, Pelham invested $61 million in new and renewed public infrastructure and facilities using a combination of Federal and Provincial grants, Development Charge revenue and debt, property tax revenue and debt (also called ‘levy debt’). Careful borrowing allows payment over a longer time frame and ensures that the residents and businesses that benefit from the capital improvements actually participate in paying for it.
As of December 2017, the Town of Pelham’s Long-Term Debt — both ‘Development Charge Debt’ (58%) & ‘Levy Debt’ (42%) — stood at $31,905,664 and was comprised of a series of 9 debentures. (Since that time, no new debt was added and because of principal and interest payments, it’s expected that the Long-Term Debt will decrease by $1,817,000 to $30,089,000 at the end of 2018.)
Debentures are a capital financing tool used by municipalities to fund capital assets and the stringent approval process is regulated by the Province of Ontario. Each of our Town debentures are set for a term matching the life of each asset and are repayable at fixed, historically low rates. (Increasing interest rates will not affect these payments.)
The largest portion of this municipal debt ($18.4 million or 58%) will be paid by development charges collected from Developers and Builders. Only the repayment costs associated with the ‘Levy Debt’ portion ($13.5 million or 42%) will be paid by Resident’s property taxes. The annual amount of principal and interest payments that we are paying on our municipal long-term debt is well below the provincially mandated Annual Repayment Limit (ARL) maximum of 25% of revenue.
As the population grows from the Town’s investment in new infrastructure, the ‘Development Charge Debt’ will get paid down and there will be more Town residents contributing more tax revenue to pay down ‘Levy Debt’ costs and build up cash reserves.
While we enjoy the benefits of the many new quality of life improvements in our community, our property tax rates remain among the lowest of all municipalities in the Niagara Region.
In fact, since 2006, Pelham’s combined taxes for the average residential property increased by 22.0% – a bit lower than the 22.7% inflation – and this includes our Levy Debt share of the the many community improvements over the years (including the Meridian Community Centre.)