Wellington County’s tax increase is lower than anticipated, but that comes at the expense of its hospital grant reserves.
On Jan. 27, the 2011 county tax levy as presented to Wellington County council stood at $73,445,200, representing a 3.2% increase.
However removing $400,000 from hospital grants reserve funds has dropped the overall levy increase to 2.7%
Warden Chris White agreed that most of the reduction to this year’s budget levy came as a result of dropping the $400,000 hospital reserve allocation.
“We’re going to wait and see what the province is doing,” he said. “We don’t want to tax for a reserve we may not need.”
As for future funding for local hospitals, White said, “I’m not going to say the issue is dead, but it is on hold until we hear what the province is doing.” White agreed “community health is critical to the health of our communities.
“It becomes a matter of setting priorities relating to municipal responsibilities and our infrastructure deficits as versus other areas of responsibilities such as health care which is done by the province.
“With all that in the mix, it’s wise to step back and see what the province is doing, then decide how we want to go forward with this. Every time you make a decision to spend money in one area, you are withdrawing it from another.”
Social services chairman Gordon Tosh said a key factor with this budget is the province has uploaded costs associated with the Ontario Disabilities Support Program, which the county had been funding through its budget.
Also, the arbitration win over the city of Guelph reduced the social services budget by about $1.5-million. Tosh stressed that amount was not actually removed from the budget, but placed into reserves. As a result, Toss explained that particular change will not affect the budget or tax rate.
In his presentation to council, administration, finance and personnel (AFP) chairman John Green said his committee did have the reports from the various departments.
Green said he and Warden Chris White had a discussion about some of the reserves and their allocations and what might be done with them. They are already in a specific location at this point, Green clarified.
“But the reserves are both reviewable and renewable,” he said.
As to the budget, Green said the draft discussions started off at a 3.2% increase, while the presentation that day was for a 2.7% tax increase.
Erin Mayor Lou Maieron had a number of questions relating to the AFP report and the budget. Maieron said when taxpayers regularly ask why taxes are so high, comments are made about provincial downloading costs. He was concerned about this year’s budget and tax rates, because this was a year when there was an uploading of costs from the county to the province of over $1-million.
As well, he spoke of $1.7-million as a result of the arbitration decision last year with the City of Guelph regarding social services costs. The arbitration ruling was in Wellington County’s favour regarding the sharing of costs for those services.
Maieron said, “We’re not looking to raise those monies through the tax bill for this year.” As a result, he questioned why the rates did not decrease. In his opinion, the rate should have come down 4%.
“I have to question the 2.7% which is more like 6.5% if consideration of the provincial upload and arbitration was taken into consideration,” said Maieron.
Green said when the review was made of the five-year-plan, original estimates were slated at over 4% then refined to 3.2%.
He said, “I think some of that was taken into consideration, from what the original plan was – particularly the arbitration.”
White added “I think there are a couple things to consider Mr. Maieron. A budget is not static. The fact that some items move off the budget in one year, doesn’t necessarily go right to the bottom line.”
White explained there are capital requirements and all kinds of things that are considered. He noted that Maieron had sat in on the AFP meetings and saw some of that.
White added the arbitration monies are being put into reserves, “because we are not sure where this arbitration is going in the future.”
White agreed the money could spent now, but if the arbitration ruling ends up different in the future and all of a sudden the county needed an extra 8%, “we wouldn’t be prepared.”
White noted that Maieron himself had always been an advocate of reserves.
“This is a smart way to deal with something that is not fully satisfied yet,” White said. He pointed out the current rate of inflation in Ontario is 3.2%.
“As a mayor now, as you will see doing your own budget, you will see the need to keep up with basic operating costs,” Whit said. “This is a below-Ontario-inflation rate, based on the budget as a whole.”
White agreed there are some new projects involving capital costs. With the exception of the provincial upload, the rest of the budget is still there, White said.
“There is a relative large deficit infrastructure in the county and we could spend a lot more money just bringing roads and bridges up to scratch. It’s a balancing act. The intention is to maintain the capacity and provide the services that are required.”
He then suggested the county tax increase may have been even higher had the provincial upload not happened.
Maieron maintained that while the outcome of future arbitrations may not be known, “there is no requirement to tax for it this year.” And, he said, “there is no need to tax for what is being uploaded to the province.”
He did not argue the need for a number of capital items added to the five-year budget.
“What I’m trying to suggest is that if we took $1-million off the levy this year,” Maieron said. He asked why the base amount of the budget would not decrease because of those costs the county no longer incurs.
He maintained the cumulative effect of the arbitration and uploads are roughly $3-million or a 4% decrease.
Maieron said if the decision was to not reduce the budget and the monies are put toward new capital projects, then that is what the people should be told.
“When we always bash the province for downloading, maybe we should thank them for the uploading,” Maieron said.
Green clarified the money is not heading into capital projects, but rather going into reserves for a particular purpose.
