Reserve to debt ratio indicates how many dollars we have in reserves for every dollar of debt owed to a creditor. This ratio is an indicator of how much money we are setting aside for future needs and our flexibility to react to adverse or unexpected events.
Reserves are "savings" that the Municipality puts aside each year to pay for large items, such as the replacement of buildings. Similar to how you might save funds for replacing the roof of your home. Each year, the Municipality has obtained its target. Meaning reserves or "savings" are greater than the amount of debt owed to a creditor. In 2017, the metric was 1.73, in 2018 it was 2.17 and in 2019 it improved by more than 20% for a ratio of 2.67. In 2020, the reserve to debt ratio was 3.51, an improvement of almost 32%. In 2021, the reserve to debt ratio was 5.04, an improvement of over 40%.
To be less than 1%.