I just read The Eagle article (April 3 edition) that quoted our Mayor referring to the “strategic use of debt” allowing “growth is paying for growth” in his annual state of Cochrane address. These two statements are simply not true.
Most of the literature on municipal planning is clear; growth does not pay for growth. The fact is that the long term costs of maintaining developments will outstrip the short-term taxation boost, especially when the off-site levies have already been spent.
There is the concept of a strategic use of debt and it is true that the Town does have some additional financial tools to make this possible. But the reality is that debt is debt and all debt requires repayment and interest. It is also true that the main financial tool that the town has is to increase our taxes. That is an inescapable reality.
It could be argued that borrowing at a low interest rate is a prudent long-term play but that requires good financial fundamentals and that nothing goes wrong. If either those elements are not present or fundamentally change then you have nothing more than a politically motivated Ponzi scheme.
The fact is that Cochrane's budget is based on record borrowing, draining reserves, abusing tools like Off-Site Levies and skyrocketing debt. To call this ‘strategic’ is a stretch at best.
There is also the inconvenient truth that we are engaged in a tariff war which is almost inevitably going to expand – this will impact us all and even a small amount of financial conservatism should have focused on this risk.
The next council will need to put us back on a path to stability and restore economic fundamentals. This task will not be an easy task, but you will have your chance to elect a new council this October.
Regards,
Dan Cunin
Cochrane, AB
