After a dozen years spent whittling down debt, Lambton County is ramping up borrowing again.
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The county, which delivers a long list of services to its 11 member municipalities, had reduced its total debt from $31.5 million in 2012 to $14.6 million by the start of this year.
But, county council has authorized $29.5 million in additional borrowing that could take the debt to $44.1 million.
That includes borrowing for county road projects, affordable housing, addition of a specialized 12-bed area for patients with dementia at Lambton Meadowview Villa near Petrolia and other capital spending.
Municipalities aren’t allowed to borrow over the long-term for operating costs but can borrow to help pay for infrastructure projects, such as roads, bridges, buildings and affordable housing, says a recent county report.
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“The County of Lambton has strived to maintain long-term financial health by effectively managing debt levels and debt servicing costs while maintaining important public services,” the report says.
“It’s a bit concerning,” said Warden Kevin Marriott. “I don’t like to see debt levels increase that quickly.”
He said some projects happened to “come together” recently leading to more borrowing.
The county moved this year to purchase a building in downtown Sarnia it had been leasing for its Share Services Centre. The lease included a future purchase option that became available sooner than expected.
Lambton used reserves and borrowing to finance the $17.6-million purchase.
“That’s still a good investment,” expected to save the county money over time, Marriott said.
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He said county debt levels have been “quite manageable” recently and he’s concerned with the recent increase.
“I just hope we don’t have a multiple of this in multiple years,” Marriott said.
The report notes debt could rise to $49.6 million in 2025 because of “foreseeable projects,” including plans to build a $3.8-million traffic roundabout at the intersection of Petrolia Line and Kimball Road.
Another report says that as of the midway point in 2024, the county is projecting a $550,000 operating deficit by the end of the year and it may be necessary to pull money from reserves to balance the budget.
It notes some of the projected shortfall is because of loss of interest income when money was drawn from reserves for the purchase of the Shared Services Center and to assist the Western Sarnia-Lambton Research Centre.
Also contributing to the projected deficit were unexpected culvert repairs on county roads and a decision to keep a seasonal “Out of the Cold” emergency shelter open through the summer in response to encampments in Sarnia, it says.
Savings in other county departments helped the projected shortfall from being larger, according to the report.
“Cost containment initiatives” will continue through the year in an attempt to “mitigate any additional operational deficit,” it says.
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