Four “ghost” projects in the works in Sherbrooke

But we are also seeing the emergence of four “large-scale strategic projects” whose medium-term financing remains very uncertain. So uncertain that although they are found within the five-year capital expenditure program (PQI) covering the years 2025 to 2029, the amounts associated with these projects are simply not included in the document studied Friday at the hotel city.

The total municipal investments of this PQI, at $530 million over five years, therefore remain very theoretical due to these four major unknowns. This involves the relocation of the municipal garage, the increase in capacity at the wastewater treatment plant, the installation of smart meters on the Hydro-Sherbrooke network and the addition of a fifth control station. electricity distribution.

All projects included, hold on, between $50 and $75 million, according to still high-level estimates. The City is obviously hoping for significant government support to achieve them, but in the absence of guarantees, they appear to be insignificant for the moment.

Asked about the accuracy of this planning tool, Mayor Évelyne Beaudin mentioned that there has always been a list of excluded projects in the old capital programs, whether over three or five years, and that they simply did not appear in the documents.

“We said to ourselves ‘we know we have to do this, but we’re going to do it later’. One thing led to another and it meant that we never worked on it. The difference this year is that we put them in the budget [d’immobilisations]. Even if the line is at 0, that means we need to start thinking about financing strategies,” she explains.

It is easy to understand that their impact could nevertheless be dizzying when the City is faced with their implementation, especially since these four projects have been prioritized because they cannot be postponed forever.

“Every year, we wonder if we are not going to experience a flood again [au garage municipal]», gives as an example Ms. Beaudin, while for smart meters, Sherbrooke is already trailing Hydro-Québec, which has made the shift.

Alert: debt on the horizon

The projections presented a little earlier at town hall by finance director Nathalie Lapierre still revealed a worrying observation. These large-scale projects could make the difference between meeting or not meeting financial targets such as the City’s debt ratio. Calculations taking into account these major projects show that the established maximum ratio could be exceeded as early as 2027. All this in a context where interest rates have climbed to a higher level in recent years, and are not likely to come down so quickly.

Ms. Lapierre therefore delivered some proposals that could potentially make their way to the City, some in the shorter term than others. The Director of Finance therefore recommends using, from 2025, the revenues from the growth point of the QST paid by Quebec to pay for fixed assets in cash. The land reserve that the City is trying to set up could also be useful, but it will be impossible to draw on it at least before 2027, she recalled.

Ms. Lapierre also presented hypotheses such as the gradual increase in the sanitation tax to finance the wastewater treatment plant project or the imposition of royalties on real estate development on developers.

What should the taxpayer be concerned about? “Generating new revenue is difficult. Want, don’t want, it’s in the citizen’s pocket that we’re going to look,” warned councilor Annie Godbout.

“We are not ready in 2025 to arrive with a new line on the tax bill or something like that. It’s too fast. These projects [stratégiques] are not yet sufficiently defined,” however indicated the mayor.

For the future, nothing is less certain, she adds. “The candidates for the 2025 election will have to be deeply aware of this dilemma,” she said, speaking in particular of these four projects and also warning against cuts which could undermine the maintenance of assets. .

On the contrary, she pleads for new revenue for the City, while elected officials like Hélène Dauphinais have instead called for “taking out the magnifying glass and removing business [du PQI]even if it pains us.”

Challenge accepted, replies Ms. Beaudin. “The executive committee did its job, cut as much as possible everything it was capable of cutting, line by line. If people see other things that we can cut, we remain open to suggestions,” said the mayor.

To be continued this fall

The preliminary QIP, which must be officially adopted later in the fall, provides for capital expenditures of almost $104 million by the City in 2025, an increase of 13% compared to municipal investments last year. The 2025 fixed assets, however, practically correspond to those planned in the last PQI for this year, i.e. 102 million.

For information purposes, we find among others the Fleurimont library project. Even if the most recent version of the project did not pass the municipal council, the project has not been ruled out, but rather starts from scratch.

In the short term, needs will be assessed by committee, the municipal council recently agreed. At the PQI, there is also $750,000 for planning the project in 2026, then $22.5 million is planned for 2028-2029, with the hope that the City will obtain half in subsidies.

The document remains preliminary. Discussions on the PQI will continue next week at Sherbrooke city hall and the adoption of the operating budget and the PQI will take place next December.