The Town of Olds has the highest debt load per person among communities of similar sizes with similar geographic conditions, $1,732.02; and now that it has voted to expand its debt after the province increased its debt limit, that per-person debt will climb even higher, to $3,010, according to retired businessman Dick Stauffer.
Stauffer was also chairman of the Olds Taxpayers Association which no longer exists.
In an email to the Albertan, Michael Merritt, the town's chief administrative officer, said the town does have "high debt" but says that's because the community has undertaken several projects over the past three years, including development of the northwest part of the community, upgrades to 70th Avenue and construction of the new Rotary Athletic Park.
He also noted capital plans in 2020 include the proposed new operations centre and reclamation of the old wastewater treatment centre land, now that wastewater is handled through the South Red Deer Regional Wastewater Commission.
Merritt's full response is provided on page 4 of the Albertan.
In late August, after being authorized by the provincial government to do so, town council passed a bylaw to increase its debt limit
The bylaw authorizes the town to borrow $10,734,023 to finance construction of a new operations centre to replace three buildings currently used by staff. That figure includes money to cover the cost to reclaim the existing wastewater treatment centre land.
The money to be borrowed exceeds the town’s debt limit, so town officials applied for — and received — special permission from Municipal Affairs Minster Kaycee Madu to exceed that limit.
As of Dec. 31, the town’s regulated debt limit was $35,027,291.
“This borrowing will put us over by approximately $1.7 million,” Monica Leatherdale, the town’s communications coordinator said in an email to the Albertan.
“We will be back within our regulated limit by 2021,” she wrote.
During an interview with the Albertan, Stauffer said he got his figures by going on the Alberta Municipal Affairs website to compare Olds' debt load to other towns of comparable population. He used 2017 figures which he said were the latest available for the comparison.
He compared figures for Blackfalds, Hinton, Morinville, Taber and Olds because he said, the conditions for all those towns are about the same. They have roughly the same population and no factors like rivers running through them or trees growing around them.
He noted that other communities that are on rivers and/or have many trees around them have suffered catastrophic events like floods and fires, so their expenses per person were presumably higher as they dealt with those issues.
According to Stauffer, town officials objected to using those towns, and suggested he analyze the debt load of towns according to their mill rate. He did so and said Olds still emerges with among the highest debt load per capita, still $1,732.02.
"Our per capita debt is still way out of line. It's right at the high end," Stauffer said.
In his response, Merritt wrote that "various shops are over capacity for years and (in) deteriorating condition as Town is not wanting to invest in the older building that were not originally designed for Operations."
Merritt said those facilities weren't built for a town of this size. He noted Olds has grown from a population of 2,285 in 1960 to more than 9,500 now.
The Albertan noted the town is in a severe recession. Given that, town officials were asked why they could not purchase or lease some of the empty buildings in the community.
Merritt said before 2011, town officials did look at leasing or buying existing buildings but "none were suitable" due to concerns about issues such as height and ventilation.
He added that nearby residents have complained about the location of the current town shops, saying they "interrupt the residential area."
Merritt indicated an Olds Institute loan guarantee is a factor.
"The debenture that was taken out and loaned to OI is in the amount of $10,108,805. The Town of Olds also guaranteed (co-signed) a line of credit for OI in the amount of $4,000,000," he wrote.
"This line of credit is not included in the Town's long term debt on the balance sheet, but is included as part of the Town's debt limit calculation."
Stauffer said rather than borrow money to build the new operations centre, council should have put away money over a period of years specifically for that project.
"I know we need a new building. I agree with that. We need a new facility. But why didn't we just plan for that over the last 10 years?" he asked.
Stauffer said it's his understanding that town council has earmarked money for a new operations centre a few times but then scrapped that idea during budget discussions. He called that "poor planning."
He said money that will have to be outlaid for the principal and interest on this borrowed money could have been saved and used for other projects in the community.
"What happens if we have some kind of an emergency, disaster?" he asked.
Stauffer also noted the town and Mountain View County are currently closely watching a situation in Peace River where that community is battling a bill from the Canada Revenue Agency for $600,000 in GST.
"What if we get into a situation where we have to come up with $700,000, $800,000, $900,000 for GST," Stauffer asked.
"It just frustrates me," he added.
"I'm kind of waiting for somebody to say, 'well, if you don't like it, why don't you run for council?' And that's what happened with the taxpayers association.
"Well, I'm 73 years old and if I run the tape measure out to, say, 90, there ain't a whole hell of a lot left on the thing, and I'm not prepared to put four years of my life on town council to put up with that kind of crap. But that's a personal issue.
"Hopefully when we have $36.7 million in debt, come the next election, people will be aware of that."
