Five years ago, the financial picture for the City of Estevan was pretty bleak.
The principle alone for the long-term debt was hovering over $40 million. It wasn’t uncommon for the city to dip into a line of credit midway through the year, before property taxes came in, so that it could pay wages and meet other financial obligations.
The debt situation was so bad that the city had to pay down $5 million in debt in 2014.
While the financial picture for the city isn’t perfect, it is impressive how far it has advanced in the last five years, according to audited financial statements for 2017 that were released at Monday night’s city council meeting.
The figure that the city often points to is the net debt, which compares assets versus liabilities. It stood at $22.9 million, down nearly $3 million from 2016. While some might question whether any net debt is a good thing, most municipalities will have that debt.
The amount of cash for the city was a shade under $5 million at the end of last year, the highest it has been in years. The annual surplus was at $4.6 million. And long-term debt dropped to $34.8 million, including interest, from $35.2 million, although the decline would have been larger if the city didn’t take out additional debt to the purchase and renovation of the new fire hall.
When the city was growing and the economy was booming, there were projects that needed to be done. We needed a new arena to replace the Civic Auditorium. We needed a new water reservoir to service the northern half of the city, especially as the city’s population was pushing further north.
But other decisions that were made left the city under that mound of debt.
As for audited financial statements, they’re an important document for the city and local residents. Even though the statements usually aren’t out until June or July, it reflects the city’s financial performance for the previous calendar year.
For those who wonder where their money is being spent, it’s about as good of a document as we get. It shows how much money is spent on each department. We find out how much is dedicated to protective services, recreation, infrastructure, water and the other services the city has to provide.
For those who gripe about financial mismanagement with the city, it shows that the city has been doing a much better job in the last few years.
At the same time, an improved financial picture might make it more difficult for the city to come to residents and ask for a tax increase or a utility rate increase each year, even if that increase is three per cent or less. When people see that the city is posting a seven-figure surplus, with a larger cash reserve, they might not want a tax increase.
The city’s rosier financial picture could also result in renewed calls for infrastructure spending, particularly resurfacing of residential roads and upgrades to sidewalks.
But at least the financial picture is better than it’s been in some times. It creates options that weren’t there five years ago.
And as the finances improve, it makes it even more important for the city to be effective stewards of its money.
