Surplus increases, Debt falls

2015-01-19

Eighth Year in a Row of Local Tax Increases below Inflation

Keeping local tax increases under control, year after year, is an achievement of which I am very proud and I thank my colleagues on council and our very hard working employees for their major contributions. However, what we have accomplished since getting our town back in 2006 is even more important.

While we inherited a sadly neglected infrastructure when Hampstead was demerged, we have since repaired much of it, including most of the roads, very many sidewalk sections, water mains and sewers. We have also introduced new programs and kept the Town safe, clean and a very pleasant place in which to live. Yet, at the same time, we have been very frugal with our tax dollars.

Being fiscally responsible means not spending beyond our means. Over the last seven years, local tax increases have been kept below inflation. The same is true this year. The average single family homeowner will see a local tax increase of 1.8%. This is below the expected inflation rate for Montreal in 2015.

The news this year is even better as the taxes that we must pay to the Agglomeration will be only 1.0% higher than last year. Overall, the tax increase for the average single family homeowner will be 1.4%.

On the island of Montreal, Hampstead is one of the most desirable communities in which to live. As a result our home values climb steadily and new buyers who demolish and rebuild or who make major renovations increase our tax base and this allows us to keep tax increases low while still improving the town.


Financial Highlights

1. On target in 2014 – In a few months the external auditor will present the official Hampstead financial report. We expect to have a modest surplus despite the cost of our Centennial celebrations and in spite of lower “Welcome Tax” revenues due to the weak real estate market. Several things contributed to the surplus. Road maintenance decreased due to our aggressive road construction program in 2012. Both long term debt and debt service have decreased. Tight management of expenses is an additional factor.

2. The Hampstead 2015 Local Budget of $13,352,678 holds spending increases to only 1.3% – Many of the town’s expenditures have increased by more than the rate of inflation and the Quebec government hit us with $85,000 of new downloading on top of the downloading in 2013. Nevertheless, we have kept the overall budget increase to 1.3%. 

3. Our accumulated surplus is expected to be $2,656,000 at the end of 2014.  It climbed modestly from the surplus at the beginning of the year. Since this is above our target amount for the accumulated surplus, we will use the excess above $1 million to cover capital expenditures and avoid taking on unnecessary new debt. The town remains in very good shape financially.

4. Dramatic decreases in debt and debt service costs. Long term debt (net of grants) was $9.33 million at the end of 2014. This is a 32% decrease since 2009. Debt service costs have dropped by 36% since 2009. Based on the latest government statistics our debt service ratio at 7.7% is 15% lower than the average for similar sized towns on the island of Montreal.
 

Key Initiatives for 2015

- Infrastructure – Our top priority is to continue water main rehabilitation. At 26% done, perhaps the best record in the province, we have come a long way in nine years but there are still too many breaks. Our street light network, sidewalks and roads will continue to be improved. Beautification efforts will focus on Applewood Park this year and other smaller green spaces. Also, our web site will continue to see improvements. In total we will spend about $2.7 million and get grants of about $800,000 for this work. Between grants and our excess surplus we expect that little or no new debt will be required.

- Prudent financial management – We will continue to keep our controllable costs below inflation through prudent spending and cost-management strategies. 

- Core services – As always, we will continue to keep our town clean, attractive and safe.

- Programming and community services – We will maintain high quality programs, while we explore additional opportunities for exciting and novel events.

- And most importantly, we will continue to prioritize Open and Frequent Communication, to ensure that our residents are informed and involved in our many Town initiatives. As always, if you have any comments or questions, 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