Centre Wellington’s $9-million 2016 capital budget has been approved – but just barely.
The 4-3 vote at the Dec. 4 council meeting had councillors almost evenly split on whether or not to endorse the Nov. 25 report and recommendation from the committee of the whole.
Voting in favour were Mayor Kelly Linton and councillors Mary Lloyd, Don Fisher and Steven VanLeeuwen. Opposed were councillors Kirk McElwain, Fred Morris and Stephen Kitras.
The resolution before council was to adopt the 2016 capital budget using a two per cent dedicated capital levy, together with the new provincial Ontario Community Infrastructure Fund which will allow the township to rebuild 13 of 16 bridges in the next ten years that are either currently closed, or at risk of closing.
The resolution also provides preliminary approval for the 2017 and 2018 years of the ten-year capital forecast, excluding equipment and vehicle replacement items.
The resolution also excluded the Victoria Street pedestrian bridge in Elora, which was voted on separately.
Changes to the budget requested by council include the internal funding of $1.4-million in bridge replacements through a loan from the general capital reserve and repaying that loan over five years using a 2% dedicated capital levy.
Another change was the removal of the reconstruction of Henderson Street from Smith to James Street and replacement of the Washington Street bridge in Salem from both the capital levy and 10-year capital plan. Both projects were moved to 2025 from 2017.
The proposed Olympia electrical upgrade was removed from the 2016 capital budget and staff was directed to replace the existing ice surfacer with a similar type vehicle.
Further, funding for the paving of the stone dust track at Victoria Park in Fergus was changed from internal sources to external sources of funds (donations).
The capital budget represents a significant portion of the total dollars spent by the township in any given year. In 2015, the capital budget, before vehicle and equipment replacement, represented approximately $7.3 million of internal sources of financing. This includes both tax supported and user pay sources of funding, and excludes debt.
By comparison, the 2016 draft capital budget proposes an internally funded amount of approximately $8.1 million. The increase is mainly the result of an additional $1.1 million for water and wastewater projects in 2016.
Council for the first time approved a three-year capital forecast that will show residents what the township is planning to do in the future. It means projects for coming years will get preliminary approval, allowing priority projects to move ahead with design and tendering, leading to construction in the actual year for which the project is budgeted. The continuation of a 2% dedicated capital levy initiated in 2015 provides a means to address bridge infrastructure requirements over the coming years, officials say.
To the average residential property assessed at $318,300, this represents an additional $20 to $25 (on average in taxes) annually over a ten-year period. The total cost over the ten year period is estimated to be approximately $1,150. This will raise an additional $2.5 million dollars annually after ten years.
Kirk McElwain
“I don’t think it’s any surprise that I don’t support this,” said McElwain in a prepared statement.
“Although I was the person who originally suggested we get a loan as a way to accomplish our real priorities … I can’t approve a budget which commits this council and the next term of council to a 2% surtax every year for the next seven years at least – just to pay back that loan.”
McElwain said if one assumes a 2.5% per year increase in the operating budget on top of the 2% capital levy, it becomes a 42% tax hike overall for those eight years.
“We have a lot of young families trying to make mortgage payments and seniors on fixed incomes who cannot afford the extra $500 per year. I wish there was an easy solution, but I think there is a lot of leverage the township could use instead of taxes.”
He said there are two companies each investing $25-million-plus into Centre Wellington: Pearle Developments and Wightman Telecom.
McElwain noted the township is going to be the largest community in southern Ontario with fibre optic cable going past every residence and business within the next two years … “and we haven’t done anything to focus on that.”
McElwain said “new industries don’t just fall off trees, we have to invest to make them happen.” He added “if we invest extra money, it can’t all be in roads and bridges.”
Fred Morris
In a prepared statement, Morris said the budget as proposed “carries a sense of desperation brought on by what I will refer to as the tyranny of the urgent.”
He added, “It appears we are desperate to manage our growing infrastructure deficit because of the fact we are closing bridges faster than we can reopen them. This disappointing reality is not lost on our community as the taxpayers themselves see the negative effects of the situation.”
Morris added, “Consequ-ently last year, we made the unprecedented decision to impose a 2% capital levy dedicated to infrastructure in the hopes it … would begin to address what appears to be an insurmountable problem.”
Morris said the 2016 capital budget alters that 2% capital levy from a annual option, to a permanent feature by making it a means of debt repayment.
He agreed borrowing $1.4 million would accelerate some bridge replacement plans, but, “I cannot accept any proposal as a legitimate or necessary explanation which at its root is designed only to lock in this tax grab.”
He pointed to a $350,000 software expenditure that may make the township work environment more convenient but “does very little for the people who actually pay the bill for this advancement.”
He said the township strategic plan must cease to be a mere wish list of projects and instead include a clear and workable business plan.
Steven Kitras
Kitras also noted he is “troubled being locked into the 2% levy.” He said when council originally discussed the matter, it was suggested the township look into debt financing – not to be locked into it.
“I felt like councillors were not being listened to … that is not what our intention was.”
Kitras also stated the strategic plan process “was not totally up-front … the questions were leading … some of council’s suggestions were changed in the wording (and meaning).”
He said one thing that has become evident to him, is the need for a budget committee with both council and public input. “That is what I asked for on the strategic plan,” but the suggestion was reworded, he said.
Kitras was also concerned with public meetings and surveys, as “councillors are becoming irrelevant and not being listened to.” He said he did want to see construction of the bridges, many of which are located within his ward.
Kitras said the budget process was rushed to finish on time so, “I’m not going to vote for this … we need to take a stand where we are listened to.”
Steven VanLeeuwen
VanLeeuwen said, “In the end, what I hear is that there is no desire to tax the residents. I don’t want to either. But we have to do the work.”
He noted Centre Wellington needs to invest in the community – “You can’t use the word ‘invest’ and not recognize that it means spending money.”
He added, “I don’t understand the disconnect. When is the reality coming in that if you want to maintain … you have to spend the money.”
Despite discussions of finding other sources of revenue, VanLeeuwen said that over his years on council, he had yet to see any of them come about.
He added, “We can deal with this right now. All we have to say is that we’re done spending money on new bridges (and repairs) and delay all projects.”
But, “We cannot just stick our heads in the sand as our bridges fall down.”
Mary Lloyd
“During the budget deliberations, I actually spoke in favour of the 2% levy,” Lloyd said, noting it was not a happy decision, but a necessary one.
“In looking at the information provided, it would cost residents (with an average assessment) less than $1,200 over the next 10 years.”
Lloyd said the 2% levy allows the municipality a revenue stream to help augment what comes out of the regular tax base.
While this does lock the township in to certain agreements, Lloyd stressed there are large subdivisions coming online that are potential tax-payers.
Even though she agreed with the 2% levy, “I’m not happy about it, none of us are happy over this. But I don’t see another way in which we are able to move forward and continue to meet the needs of the community.”
Don Fisher
Fisher also supported the budget as presented.
“It comes down to the point where every time governments talk about investment or funding or partnerships … they mean spending. And spending means tax dollars.”
Fisher said, “There are not a lot of options. We have to spend and the question is how much?”
He said “the current budget doesn’t deal with all the problems, but it is a plan to start to address the problems we all can agree we need to face.”
Fisher agreed there is a cost and that it will be uncomfortable for some people.
“But to do what we truly need to do, the costs should be higher,” Fisher added.
“This will provide the best bang for the buck sooner by using this debt option.”
He said this allows the municipality to undertake projects which are priorities.
Fisher added nothing proposed precludes the municipality from looking for every alternative dollar it can find.
“And somehow I think it is doing a disservice to staff to think we are not trying to do that already.”
He concluded “this is not a comfortable decision, but it is the right decision.”
Kelly Linton
“By the nature of the discussion,” Linton noted, “this budget was never a slam dunk.”
Linton offered considerable thanks to staff for bringing forward options. At the same time, he expressed disappointment there was not full support of the budget.
“Any government called good government, always goes through the people and asks what their thoughts are,” he said.
“I think that is the responsibility of good government.”
He also noted the township’s strategic plan does offer clear guidelines to provide accountability.
“It is more important for us to do things than to talk about doing things. This is an action-oriented budget.”
He said council will be look at options of alternative service delivery in the near future.
“No one likes putting in new taxes, but that is the situation we find ourselves in,” said Linton.
“It’s time to move beyond blaming other levels of government. Those days are over and we have to take responsibility for the situation we’re in and that’s what we’ve done with this budget.”
In a press release following passage of the capital budget, Linton said. “This is a success for staff, council and the residents of Centre Wellington.”
He added “The budget process is a great lesson in listening, engagement and democracy.
“Staff came to council with a number of recommendations and suggestions, we held a budget town hall meeting, and offered a survey that residents could fill out to show where they would like their tax dollars to go.
“Through engagement, we established a 2016 budget that is fair and manageable. This is a perfect example of open and honest government.”
