Tuesday, January 12, 2010

DBRS notes Edmonton`s growing debt

From a Jan 6 press release by the Dominion Bond Rating Service:
... concerns are mounting with respect to the scope of the current capital plan and the amount of new borrowing required over the years to come, which DBRS notes has the potential to push tax-supported debt to a level no longer consistent with the current rating.
... When including substantial net capital spending, the City posted a deficit of $610 million. Despite cost escalation from service expansion and wage inflation, balanced operating budgets are expected for the foreseeable future, although they will most likely rely on tax rate increases.

The City is projecting that the tax-supported debt burden grew by 60% in 2009 to $878 million, or $1,123 per capita, with ongoing capital projects pushing the burden to roughly $1,800 per capita by the end of 2011. ...

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