JASON SETNYK
Cornwall city council is facing growing long-term financial pressures, with projected annual debt repayments expected to reach about $25 million by 2029.
The issue emerged during council’s review of the 2024 Annual Report on Municipal Debt Limits, where Councillor Dean Hollingsworth questioned the scale of current and future borrowing. Referencing figures in the report, he noted the City carries approximately $66 million in existing long-term debt, along with more than $114 million in debt already approved but not yet issued.
“If we did everything that we’ve technically approved, we’re looking at $180 million worth of debt,” Hollingsworth said.
Treasurer Tracey Bailey clarified that the figures cannot be combined directly, as existing debt is repaid over time while new borrowing is issued. However, projections still point to a significant rise in annual repayment costs over the next decade.
Hollingsworth then asked whether principal and interest payments could reach $25 million annually by 2029. Staff confirmed that estimate reflects current debt, approved borrowing, and anticipated financing tied to the City’s 10-year capital forecast.
“That’s an awful lot of money. It’ll be the next council’s decision on how they’re going to manage that,” Hollingsworth said, noting those costs are ultimately funded through property taxes and water and wastewater rates.
The increases come amid mounting financial pressure on residents. In January, council approved a 5.41 percent tax increase alongside a 6.81 percent rise in water and wastewater rates, as the City continues to balance infrastructure demands with growing debt obligations.
Councillor Fred Ngoundjo also raised concerns about the magnitude of the projected payments. “That’s very high,” he said.
Administration emphasized the figures are projections tied to long-term financial planning, but acknowledged the implications for future budgets. “We have some difficult decisions to make,” CAO Tim Mills told council.
According to the report, Cornwall had $66.3 million in issued debt as of Dec. 31, 2024, with an additional $114.6 million approved but not yet issued. The City’s estimated annual repayment limit, set by the province, is approximately $30.9 million, meaning current projections approach that ceiling.
While the City remains within provincial borrowing limits, it exceeds its own internal target, which aims to keep annual debt payments at roughly 10 percent of net own-source revenues, or about $15.4 million. Based on that policy, the City is already above its preferred threshold.
The report also outlines a broader financial strategy to gradually shift away from debt financing toward reserve funding, limiting borrowing to major capital projects with long lifecycles and significant costs.
2024 Audit Findings
Cornwall City Council has approved its 2024 audited financial statements, with external auditors issuing a clean opinion while noting ongoing improvements in financial reporting.
Lori Huber, Lead Audit Engagement Partner with KPMG, said the statements “present fairly, in all material respects” the City’s financial position as of Dec. 31, 2024. She confirmed there were no significant uncorrected errors or issues related to fraud or governance.
“We did not identify any significant financial reporting risks other than the presumed risk of management override of controls,” Huber said.
The audit used a materiality threshold of $6.5 million. One uncorrected item of about $1.33 million was identified, but it was limited to a balance sheet adjustment and did not affect the City’s annual surplus.
Huber said a previously identified deficiency in financial reporting controls has been partially addressed, with continued progress expected. However, some gaps remain, including issues with reconciliations and reserve entries that required adjustments during the audit.
Hollingsworth questioned a drop in cash from about $19 million in 2023 to $2 million in 2024. “Where did the $17 million go?” he asked. Huber said funds were shifted to investments and debt financing in 2025 would replenish balances.
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