Belleville Debt Management Policy

Belleville’s original Debt Management Policy was approved in 2017. The Debt Policy was updated on July 13, 2020:

• Long term debt means a repayment term of 5 years or more.
• Projects must have a value over $1M
• Projects must have an estimated useful life greater than 15 years.
• Maximum amortization increased from 15 to 25 years or the estimated life of the asset being financed per the Belleville’s Tangible Capital Asset Policy.
• Debt servicing costs cannot exceed 12% of operating revenue. (Ontario applies a limit of 25%).
• Debt servicing costs for new debt issues must be reflected in the Operating Budget and raised through Taxation or User Fees.
• Bylaw is required with the application process.
• Current debentures (loans) are listed in Belleville’s Financial Statements.
• Summary of the debt position, forecast and ARL will be provided to Council annually.

2025 Asset Management Plan expects Belleville to reach ARL limit by 2033

While some service areas may require higher levels of debt than others, the City’s Debt Policy measures debt capacity on a City-wide basis. The table below presents the projected maximum debt level the City is expected to reach over the next 10 years, based on the current 10-Year Capital Plan and the scenarios outlined above:

2023 Financial Statements

The Sanitary Sewer Reserve Fund is currently underfunded, with a 2024 year-end balance of $8.8 million compared to the reserve fund target of $33.5 million. As a result, $101 million in new debt is projected, in addition to $43.7 million in previously approved but unissued debt. These amounts remain within the City’s debt policy, which caps debt servicing at 12% of own-source revenue.

2023 Capital Budget

$17.2M in debt:

• Redevelopment of the Old Fairgrounds Site – $1.2M
• 3 Zero Emission Bus Replacements – $1.3M
• Fire Pumper / Rescue Vans – $3.2M
• Hillcrest Park – Phase 2 – $2.0M
• Wastewater Treatment Plant Upgrades – $9.5M

Based on current financing rates, the financing charges for each additional $1 million in new debt represents $66,100 annually. Impact of annual debt for 2023 projects would represent an increase in taxation of 0.39%

2022 Capital Budget

$25.79M in debt:

• Belleville Agricultural Society Site Development $11.65M
• Belleville Agricultural Society Exhibition Building $11.64M
• Hillcrest Park $2M
• Farnham Rd. $500k

2021 Capital Budget

$31.3M in debt:

• Mineral & Maitland Road $10.5M
• Police Station $19.4M
• Agricultural Site Relocation $1.4M

2020 Capital Budget

$21M in debt:

• Haig/Station 2020 (Jan – Jun Issue) $3.5M
• Downtown Phase 3 2020 (Jan – Jun Issue) $7.4M
• Bardon Building 2020 (Jan – Jun Issue) $6.9M
• LED Streetlights 2020 (Jan – Jun Issue) $1.87M
• Fire Vehicle 2020 (Jan – Jun Issue) $1.4M

2017 to 2020

Between 2017 and 2020, Belleville issued $20.6M in debt for infrastructure projects.