The 2010 Wellington North Township budget will mean an increase in local portion of the residential tax bill by 2.9%.
The impact on an individual residential tax bill will vary according to assessment. For a home with an assessment of $150,000 the local portion of the tax bill will increase $22.80 to roughly $798; for a home valued at $250,000, the increase is $38, bringing that tax bill up to $1,330.
Those amounts are for the local portion of the tax bill and do not include the county or education levies.
In his report to Wellington North council on March 22, finance committee chairman Dan Yake said as a general guideline, a 1% change in the rate represents $50,000 raised through taxation.
Yake said the budget includes total spending for operating and capital of $10.75-million which includes $1.28-million funded through the federal and provincial governments. He said if assistance had not been included, total spending would have only been $9.47-million which is lower than what was spent in 2009 ($9.6-million).
Township revenues including fees, rentals, operating grants and other municipal assistance bring the net tax levy to $5.18-million as opposed to $4.81-million last year.
“Included in the general budget as well, is an amount of $155,000 which is an estimate of the annual payment required for the long-term debt expected to be incurred,” Yake said. He added, “We’ve spent several months putting this together, and I think we’ve got it to the point where we’ve put together a pretty good budget that we should be quite satisfied with.”
General revenue
Yake said general revenues include a grant from the Ontario Municipal Partnership Fund (OMPF) of $1.02-million, a reduction of $257,000 from 2009.
“We’ve met with the provincial government to discuss this [decrease],” Yake said. “We’ve told them we’re not happy about it. Municipalities across the province have experienced the same problem, but the province has made up its mind and that’s what they’ve done.”
Yake said he is concerned not only with what happened this year, but what may happen in the future.
“Councillors have been advised by staff of this reduction. The mechanism behind the calculation of this grant has been discussed at length with provincial representatives and with th Association of Municipalities of Ontario (AMO),” he said.
AMO represents most Ontario municipalities on municipal issues with the province and it continue to work on this issue, Yake said. In addition, the general revenue includes income from penalties and interest on unpaid property taxes.
Insurance
Yake said Wellington North was advised late in 2009 the total premium for 2010 insurance would increase by 27%.
He explained that reflects the overall increase in personal injury claims experienced by municipalities in general and the increase in value of municipally owned properties.
Administration
New computer software is planned for the office in Kenilworth.
Changes include an upgrade to core accounting software and facility management software. The upgrades are also needed to deal with the Harmonized Sales Tax which starts July 1. The cost for upgrades is about $50,000, Yake said.
He added computers used by councillors will be replaced at a cost of about $10,000.
This replacement will be coordinated with the inauguration of the new council, following the municipal election this fall. The new council will receive new computers while current council will continue to use their existing ones.
Property
In 2006, council considered the purchase of a farm owned by Harold and Nancy Whetham in order to gain access to the gravel on the property to ensure a supply of gravel for the annual gravel program without being subjected to the retail gravel marketplace. Yake said the gravel pit was severed from the remaining farm property in 2009 and the farm was sold in the fall of 2009.
The remaining amount on the farm will be paid in the 2010 budget and subsequent years.
In addition, Yake said the wall at the sidewalk in front of the Arthur Legion south to the corner of Eliza Street is to be replaced.
Yake said, “This work is currently in the planning stage to determine how the structure will be constructed. The budget includes $125,000 for this project, to be funded with long term debt.
Fire
The fire budget includes a transfer of $175,000 to a reserve fund for future vehicle purchases. A new pumper has been ordered ($448,000) for Arthur, with delivery expected in 2011.
Conservation Authorities
Wellington North deals with three conservation authorities.
The Grand River Conservation Authority had a 3% increase; the Maitland Valley Conservation Authority had a 4% increase; and the Saugeen Valley Conservation Authority levy dropped by 2%.
Yake noted, “These levies have increased significantly in previous years, apparently the result of reduced provincial funding.”
While he said that the changes for 2010 are not as significant as in the past, he suggested they changes can be partially attributed to the impact of the 2008 reassessment changing the pro-rata sharing of the total assessment among other municipalities in their watersheds.
“Council has suggested that the authorities, along with the municipalities, lobby the province to improve their funding. Councillors and staff recently met with the Minister of Natural Resources at the Good Roads convention to discuss the provincial funding of conservation authorities.”
Public Works
“The budget for public works includes the purchase of a new loader ($168,000) and two pick-up trucks ($60,000). Those replace existing equipment. Resurfacing and minor construction projects are planned.”
Yake said the current pickup trucks will be reallocated within the municipality,
The gas tax that the municipality receives annually (2010 – $343,743) from the federal government will be used to fund resurfacing and repair projects, using Township equipment and staff: Jones Baseline in Arthur, a Sideroad 5 West, bridge repair on Sideroad 7, and dealing with Concession 4 river erosion (County Road 109).
Yake added that the federal Gas Tax has been guaranteed to continue until 2013 at the amount received in 2010.
He said Wellington North received funding from the communities component of the Building Canada Fund, $2.76-million, for the Durham Street pumping station, the reconstruction of a portion of Normanby Street, and a second round of $2,08-million for the reconstruction of Egremont Street.
He said the Normanby Street project was completed in 2009. In addition the township was successful in applying for funding assistance from the Infrastructure Stimulus Fund ($1.2-million) for the replacement of the Cork Street sewage pumping station.
“These funding programs provide two-thirds funding from the federal and provincial governments. The township’s share (one-third) is planned to be provided with long term debt. He noted here is also a further amount of $50,000 transferred to a reserve fund for a new works shop in Arthur.
Recreation
Yake said the township received funding from the Recreation Infrastructure Canada (RInC) of $428,768 to reconstruct the parking lot at the Arthur community centre, replace the main hall flooring at the centre, and install an elevator there to allow better access to the upper hall.
In 2009 the parking lot was finished with the exception of the final lift of asphalt and the flooring was done last fall.
In 2010, the elevator is expected to be completed. The township’s share (one-third) is planned to be provided with long term debt.
In addition, there will be new lighting in the lower hall, to improve lighting and reduce hydro use. Washroom stalls in the lobby will also be replaced.
Funds for those two projects will come from a recreation reserve fund established for this type of infrastructure replacement.
Yake added that repairs will be made to the Lion Roy Grant pool in Mount Forest are expected to cost $65,000.
Planning
Yake said the planning budget includes an amount to pay legal costs associated with the application for the Wilson Quarry.
Economic Development
The economic development department budget has increased from 2009. He attributed that to the increase of the two part time staff to a full year.
“This increase amounts to 16%,” Yake said.
The department budget and plan is to continue with its business retention and expansion Program involving the Wellington North Agri-Showcase and the Business and Industry Showcase planned for early spring. The program also includes support for the Wellington North Community, Visitors and Business Guide and the launch of a business visitation and retention program.”
Yake said the department is working on a land development program and a developers’ guide for industrial and commercial development. The tourism, marketing, and promotions program will continue to deliver a variety of programs including the county-wide festivals and events brochure, a web-site, the Butter Tart Trail program, ongoing promotion of municipal facilities and attractions, and a variety of agri-tourism opportunities and initiatives.
Long Term Debt
Wellington North’s long term debt is primarily comprised of four major debentures – one related to the Mount Forest sewage treatment plant and three to the Mount Forest and District Sports Complex.
The total balance outstanding is $8,944,607, with a total 2010 annual payment set at $1,019,955.
Reserves and reserve funds
Yake said at the end of 2009, $1.5-million in reserves and $3.27-million in reserve funds have been set aside.
“These monies have been set aside primarily to fund anticipated future capital expenditures.”
He said the reserves provide working capital to fund the normal operations of the township. Reserve funds are segregated from the general resources of the township and are invested to provide growth from investment income. Reserves remain as part of the township resources and do not earn investment income.
“Amounts collected as development charges must be used in accordance with the township’s development charges bylaw, the Development Charges Act, and the underlying development charges study. Park fund levies are collected in accordance with the Planning Act, which also provides guidelines for their use.
He said the township annually receives a federal gas tax grant that must be spent in accordance with an agreement that the township has with Canada. Any unspent gas tax monies from year to year must be retained in a reserve fund to be used in future years.
Capital Financing
Yake said, “As part of the financing proposed for the capital expenditures planned for 2010, long term debt is necessary.”
He said the nature of tha tdebt and the source of the capital will be proposed to council by the finance committee as the funds are required throughout the year.
“As noted above, there are significant funds accumulated in the reserve funds and these funds must be invested to ensure an annual growth beyond any annual transfers that may be budgeted from year to year. It is therefore recommended that the reserve funds be considered as a source for some or all of the debt capital needed paying an interest rate comparable with market rates.”
Yake provided following list of the projects (roads, sewer, and water) that are expected to be funded in 2010 with long term debt: wall from Arthur Legion to Eliza Street, $125,000; Arthur fire pumper truck, $448,000; Egremont Street (roads, sewer, and water) $917,067; Cork Street, $336,440; Arthur community centre, $160,000; Durham Street pumping station, $904,793; Cork Street pumping station, $610,000
Those amounts will add $3,501,300 to the total long term debt.
“In conclusion, the 2010 budget presented the township with some major issues and difficult decisions.”
Additional comment
He said Wellington North had to absorb the reduction in the OMPF grant of $257,000 plus the significant increase to the township’s insurance premium.
Those strains to the operating budget, Yake said, are in addition to overall cost increases that crossed all departments.
“Our finance committee and staff did not use that as an excuse. They worked diligently putting together a budget knowing that we were starting in the hole right off,” he said.
At the same time, Yake noted significant funding from the federal and provincial governments in 2009 for different infrastructure projects.
“While the funding is very much appreciated and further enables the municipality to renew our infrastructure, the township commitment to these projects necessitates the assumption of additional debt.”
He explained the federal and provincial governments provided two-thirds funding, but the township still had to come with its one-third share.
“We knew early on when these projects were coming out, that sooner or later our third would catch up with us.”
He added that because of the township’s good financial position, it can take on the addition debt load, and there is still a healthy reserve fund in case of emergencies.
He noted the budget process started last October with the intent of getting the budget done earlier. “We wanted staff to start thinking about their budgets earlier.”
Last year the budget came in at the end of May.
“I’d set a personal goal to have it done six weeks earlier. By having the budget completed tonight, it’s about eight weeks earlier than last year. Once this budget is passed, we’ll continue to move forward on next year’s budget.”
He is also planning a complete review of the budget process.
Councillor Ross Chaulk said, “You’ve done damn good getting it out early.”
Councillor John Matusinec congratulated those who’d worked on the budget. “It’s a very good budget … considering.”
Treasurer John Jeffrey noted that the township had yet to receive official information on the county or education rates.
When asked how much the $10.7-million 2010 budget itself had increased from last year, Yake said township spending is actually down if one excluded the $1.2-million related to infrastructure projects.
But if it is included, Yake said it is up from $9.67-million last year, “so it’s probably around 10%.”
Broomhead explained that portions of the long-term debt, relating to water and sewer projects are addressed through water and sewer rates, and as such will not affect rural ratepayers.
