Hampstead’s Rosy Future

2013-05-27

In past messages, I have written about strategic investment decisions that we have made and how they would lead to operational savings. However, even I never expected that the savings would be as dramatic as they have turned out to be this year. The 2012 financial results have come in and the operating surplus is about $1.6 million on a $13 million local operating budget or 12%. Our actual official operating surplus was over $1.7 million, but I have eliminated one-time items to paint a truer picture.

The surplus was about half from higher revenues and half from lower expenses. On the revenue side: among other things, we got $276,000 more than budgeted in ‘welcome tax’ revenues because, in spite of what you have read about a slowing real estate market, in Hampstead, everything that we have done has made Hampstead the place where young families want to live. Demand remains strong. We also got an extra $60,000 from the Belvedere condo development. Another $88,000 is related to the fact that you, our residents, are recycling more and putting out less garbage. As a taxpayer, I thank you.

On the expense side: we had lower water main maintenance costs because we had fewer breaks due to the rehabilitation of almost 25% of the town’s water mains. We also had much lower claims for flooded basements. Our road maintenance costs were down due to the greatly improved state of our roads and the same for sewer maintenance. And, our interest costs on long-term debt were down. Finally, we saved over $200,000 from operational efficiencies and personnel management.

Spending the excess surplus

As I write this, the council has not fully decided what to do with the extra surplus, but we will put $500,000 towards debt repayment in 2014. That will further reduce our debt service costs which are already down 28% since 2009. We will put $450,000 into a special fund to eventually replace all the Ash trees that will be lost to the Emerald Ash Borer infestation. There will be more funds for beautification, sidewalk repairs, reconstructed pathways, and so on. Our target accumulated surplus is $1 million to $1.5 million so we will not keep the excess in the bank earning next to nothing.

Looking to the future

Over the coming years, we can expect even more good news. Our debt service levels will continue to drop as we retire long-term debt early. We will also have much less need for new debt, since we have already repaired so much of our infrastructure. Of course, there are still some infrastructure needs and they will be addressed, but at a slower pace than during the past years.

The Belvedere condo development is expected to be completed in 2015 or 2016 and that will bring an increase in local tax revenue of at least 4%. It will also lead to higher ‘welcome tax’ revenues. Just as exciting is the fact that more homes will come on the market as baby boomers sell their homes and move into the Belvedere. Those homes, sold by the baby boomers, will be bought by young families. In anticipation, we will further improve our programs and facilities for children and teenagers.

It may have been boring to aggressively restore our infrastructure but doing so has laid the foundation for a very rosy future for Hampstead. If you have any comments or questions on this topic or anything else related to Hampstead, please e-mail me at WSteinberg@Hampstead.QC.CA or call me 7 days a week until midnight at my home office (514) 483-6954.


Sincerely,


Dr. Bill Steinberg
Mayor, Town of Hampstead