A staff analysis of a consultant’s annual review of Ontario municipalities indicates the township is on the right track in dealing with its infrastructure deficit and long-term financial challenges.
Since 2000, BMA Management Consultants Inc., an independent consulting firm, has undertaken an annual comparative study on behalf of participating Ontario municipalities.
In 2015, Wellington County was among the participants, with all lower tier municipalities providing data in various categories. The review looks at both financial and operational aspects of municipal operations in a number of categories.
Municipal Study – 2015 includes statistics related to population growth, tax rates and assessment, development charges and other selected indicators.
Mapleton director of finance Yufang Du presented a report highlighting some of the study’s implications for Mapleton at the Jan. 26 council meeting.
The report looks at socioeconomic factors “which provide insight into a municipality’s collective ability to generate revenue relative to the municipality’s demand for public services,” the staff report states.
The BMA review shows Mapleton with the fifth largest population (10,359) among Wellington County’s seven lower tier municipalities and also the fifth highest average household income ($93,190).
BMA figures show Centre Wellington, with the highest population, has a estimated average household income of $103,900 (fourth on the list).
Puslinch, with the smallest population (7,489), boasts the highest average household income at $144,691.
Minto and Wellington North have the lowest income levels, $76,178 and $76,787 respectively. Minto’s 2015 population was pegged at 8,423, compared to 12,018 for Wellington North.
The study puts Erin’s population at 12,220 and average household income at $132,924 and Guelph-Eramosa’s numbers at 12,952 and $127,048.
Across the county, average household income was estimated at $107,817.
Mapleton was also fifth in terms of population increase between 2011 and 2015, with a 3.7% growth rate. Erin was the fastest-growing municipality in the county with a 13.5% rise in population during the same period, followed by Puslinch at 6.5%, Wellington North at 4.7%, Centre Wellington at 4.5%, Mapleton at 3.7% and Minto at 1.1%. Guelph-Eramosa experienced a drop in population of -3.8% during the period. County-wide the growth rate was 5.7%.
Weighted assessment
The review shows Mapleton has a large proportion of farmland and the township’s percentage change from unweighted to weighted assessment is highest.
“It indicates that the tax burden shifts from farm class to residential class,” the staff report states.
BMA figures show Mapleton is in good financial position on a cash basis, but at a deficit of 21.4% when comparing operational revenues to operating expenses.
Mapleton also has the highest asset consumption ratio (accumulated amortization compared to gross cost of capital assets) in the county at 65.2%. Guelph-Eramosa is lowest at 35.5%.
Du says Mapleton’s high ratio “indicates significant capital asset replacement needs.”
Mapleton’s reserves are below average compared to other Wellington municipalities and the provincial average for municipalities with a population under 15,000.
“We have a higher risk in the face of variable and uncontrollable factors, such as interest rate change or reduced provincial and federal government funding,” Du states in her report.
However, she notes, at the beginning of 2015, Mapleton’s debt service ratio is less than average, indicating the municipality has more room to borrow. The provincial government limits the level of debt that may be incurred by municipalities to no more than 25% of the total own-source revenue that can be used to service debt.
However, the study also shows Mapleton has the lowest ranking for own-source revenue in the county, limiting the municipality’s flexibility in terms of the ability to issue debt responsibly without impacting its credit rating.
Overall Du states, “The report findings support the township’s multi-year budget, asset management plan and the financial strategies discussed during the budget process.
“It indicates that Mapleton has a large infrastructure deficit and significant long-term financial infrastructure challenges.”
Council accepted the staff report as information.
“I found the study interesting for sure,” commented councillor Michael Martin.
