Brampton retains good credit rating amid controversies
Robust cash flow one of several factors in city's credit rating
Oct. 27, 2017
The City of Brampton has had its triple-A rating affirmed by Standard & Poor's (S&P), holding on to the highest credit rating for a municipality.
Brampton's status was given on a number of factors including the city’s “exceptional” liquidity, “robust cash flow capability” and “dynamic, well-diversified economy.”
The rating allows the city to borrow money at a lower interest rate.
“A solid financial management system is important as we advance key strategic initiatives and strive to build a stronger global presence for Brampton,” said Mayor Linda Jeffrey. “As a city, we continue to focus on good municipal governance and accountability to our residents.”
Upon her election win, Jeffrey hired former Ontario Auditor General Jim McCarter to review the municipality’s financial health.
That review highlighted several concerns on the financial front from skyrocketing staff payroll to depleting reserves, and set in motion wholesale changes at the local level including an overhaul of senior management.
That document also justified levy increases above the rate of inflation in recent years to cover off services and infrastructure upkeep.
Since then, city leaders have moved on a number of improvements after years of political turmoil and alleged mismanagement by the bureaucracy.
Earlier this year, the mayor unsuccessfully tried to rehire McCarter to review those changes brought about during this term.
S&P described Brampton as being “very predictable” and boasting a “well-balanced institutional framework.” This follows a recent police investigation launched after a June internal audit report that revealed senior staffers for years paid out hundreds of thousands of dollars in bonuses to non-union employees without council’s knowledge or approval.
The police investigation found no criminal wrongdoing by staff in the payment scheme referred to as outside policy requests.
Along with the credit rating, S&P has issued a stable outlook for Brampton. The report also notes Brampton has improved budgeting practices after scoring low grades in the past for budget planning.
The report said “restructuring within the last two years resulted in the strengthening of Brampton's budgeting practices, improvement in control measures and transformation of its senior management.”
The mayor and councillors recently pledged $50 million, over 10 years, toward a post-secondary facility led by Ryerson University and Sheridan College. That’s in addition to $100 million for a “joint-use centre for education, innovation and collaboration” in the downtown. Councillors will consider several options to come up with the money to fund the project including borrowing money.
While the city is carrying debt is has yet to issue any debentures.