WELLINGTON COUNTY – The county’s number crunchers are projecting a year-end surplus between $1.8 and $2.5 million from this year’s $108.5-million budget.
According to a recent pre-2022 budget overview, less money than expected will be spent on policing, economic development, government, general expenses and supplementary taxes, culminating in a surplus.
County staff are recommending this year’s surplus tax dollars be used to make a dent in long-range expenses rather than using the cash to temporarily soften the burden on taxpayers.
That means reducing debt (and not spending as much money on interest) and spending on repairs and proactive maintenance for county infrastructure and capital, DeHart explained to the Advertiser.
There’s a significant “infrastructure gap,” as DeHart called it—a backlog on roads, bridges, culverts and stormwater management—the likes of which would cost $628 million in today’s dollars to make new again.
The annual cost, averaged across 10 years, to address the county’s infrastructure gap and keep up with scheduled maintenance is nearly $23 million. The backlog itself, according to DeHart, is $60 million.
“The poorer condition it is in the more expensive it is to replace, so if you do more proactive infrastructure management then it costs you less in the end, so we could use some of the surplus to pick a project that needs to be worked on,” DeHart said of staff’s recommended use.
The pre-budget look concludes the county will exit another pandemic year in “good financial shape.”
That could be the case, but looking into the crystal ball of next year’s budget reveals several factors anticipated to burden the taxpayer with a higher bill.
For one, inflation is stretching the cost of goods and services, including fuel for vehicles, food for long-term care residents at Wellington Terrace, building materials like steel (factoring into construction costs for bridgework), and rising wages for staff to accommodate rising living costs, both for union and non-union employees.
In September, the Consumer Price Index in Ontario (a way of measuring inflation) had increased by 4.4% over the same time last year, according to Statistics Canada, which also points out Canadians are being dragged through the most rapid year-over-year swelling of the CPI in 18 years.
How much of an impact still-rising inflation will have on next year’s budget is hard to tell, but some projects may take precedence over others, depending on material costs.
Anticipated new builds like the Arthur garage and public works facility and a new library branch in Erin will also drain tax dollars and bring on debt.
There are also rural internet improvements and spending on the county’s climate change mitigation plan, which includes spending money on upgrading to electric fleet vehicles.
And taxpayers can’t forget about the impact of COVID-19 just yet.
Emergency management costs, currently well over budget at the end of September, will likely round out the year in the black thanks to grant funding. The amount the county spends on its contract with Wellington-Dufferin-Guelph Public Health also won’t change.
The financial impact of the virus on the county, DeHart said, will instead come from redeployment of county resources.
A vaccination coordinator was hired, staff were shuffled around to support vaccination clinics and a good chunk has been spent on advertising to get word out about the clinics, to name some of the expenses that make up the estimated $650,000 to $750,000 deficit in public health spending.
There is some good news to be found in:
- lower-than-expected costs of policing projected for next year;
- more tax dollars than anticipated coming from new properties and growth;
- debt reduction from last year’s surplus;
- less spending on Ride Well and the community business improvement grant programs; and
- deferred hiring of new staff positions under the economic development banner.
The 2021 budget projected a 4.2% tax increase over this year’s 1.2% rate increase (approved in January) to pay for government, programs and services in 2022.
But at an October finance committee meeting, councillors directed county staffers to wring the budget out to produce an increase around the 2% mark, depending on where the dollars and cents fall by end-of-year.
“We’re working toward that figure,” DeHart said.
A preliminary budget will be presented to the administration, finance and human resources committee on Nov. 16.
