ABOYNE – Wellington County councillors were presented budget options with possible tax levy increases ranging from 2.1 to 4.2 per cent at a special county council session here on Jan. 7.
Starting from a base scenario with an increase of 4.2% over the 2018 levy, councillors were provided examples of six adjustments council could make to the 2019 levy.
The presentation was designed to highlight the effect of budget adjustments not only in 2019, but in future years as well, treasurer Ken DeHart explained.
A 4.2% levy increase would result in the levy rising from just over $95 million in 2018 to around $99 million in the coming year.
Staff provided council with four options for reducing the proposed levy increase to 3.2%:
– defer $1 million in spending to 2020;
– reduce spending by $1 million in 2019;
– reduce spending by $1 million annually over the next three years; and
– use reserves to reduce the levy by $1 million in both 2019 and 2020.
The spending deferral would see council faced with the prospect of increasing the levy by 7.1%, rather than 5.1% in 2020. Reducing spending by $1 million in 2019 would mean a percentage increase of 6.1% rather than 5.1% in 2020. Annual reductions of $1 million over the next three years would leave levy projections unchanged.
Using reserves to reduce the 2019 and 2020 levy would mean a 5.8%, rather than 4.8% increase in 2021. Using reserves to reduce the 2019 levy by $2 million to 2.1% would mean a levy increases of 7.2% in 2020.
Using debt to reduce the levy by $2 million, a 2.1 per cent increase in 2019 would result in levy increases of 7.4 per cent and 4.8 per cent in 2019 and 2020.
DeHart said the examples illustrate that “when thinking of making budget adjustments it’s better to make a permanent reduction in service level,” than to use stop-gap methods such as spending deferral, debt issue or spending from reserves.
The treasurer said the exercise was intended to show council the implications of the various approaches.
“It’s not to discourage council from making adjustments to the 10-year plan, but just to keep it in mind,” he explained. “This is how some municipalities have got into historical problems with infrastructure deficits.”
Current projections show an anticipated $221.3 million in expenditures in 2019, with expenditures forecast to grow to $289.8 million by 2028 with average annual increases of 4% over 10 years. The increases are mainly driven by infrastructure requirements.
DeHart explained that above-average assessment growth of 2.23% will help to mitigate the impact of the levy increase on the tax rate, which is expected to come in at 2.7%. Between 2020 and 2028, tax rate increases of between 3% and 3.9% are expected annually.
The county’s 10-year plan calls for $371.3 million in capital investment over the term, with $42.9 million in capital work slated for 2019.
Several proposed 2019 capital projects generated some discussion at the meeting, including the Continuum of Care project on Wellington Place lands in Aboyne.
Some councillors questioned an initial allocation of $1 million to the project, which has not yet been approved by council. DeHart explained the allocation is for initial study phases of the project which, when rolled out, “would not cost any net tax dollars.”
The project, which involves providing a range of senior housing options on Wellington Place lands, is anticipated to eventually generate profits that would help subsidize the operation of Wellington Terrace, DeHart explained.
“That’s a program that’s going to generate revenue in the future … there’s definitely a huge need for it,” noted councillor David Anderson.
However, Anderson added, “I think if we make this financial commitment, I think we should look strongly at supporting the need in Wellington County.”
Earlier in the meeting councillor Jeff Duncan expressed concern about spending $1 million on the project, noting the county is required to offer the services to any Ontario resident if Continuum of Care proceeds.
Several councillors also questioned a proposed $300,000 allocation from reserves for a gazebo, food preparation area, trail work and storage on the property of the Hillsburgh library.
“I’m little concerned with another 300,000 being spent at Hillsburgh library,” said councillor Mary Lloyd.
“It would impact on library staff but I don’t know that the library board knew that might be coming forward and I think that they should have some discussion around … moving ahead with it right at this point might be a good direction to go in.”
Mapleton Mayor Gregg Davidson said, “We have put in a significant amount of money for the Hillsburgh library over the last number of years …
“I’d like to see some results from the economic development that we’ve put in there before we add more approved by council. DeHart explained the allocation is for initial study phases of the project which, when rolled out, “would not cost any net tax dollars.”
The project, which involves providing a range of senior housing options on Wellington Place lands, is anticipated to eventually generate profits that would help subsidize the operation of Wellington Terrace, DeHart explained.
“That’s a program that’s going to generate revenue in the future … there’s definitely a huge need for it,” noted councillor David Anderson.
However, Anderson added, “I think if we make this financial commitment, I think we should look strongly at supporting the need in Wellington County.”
Earlier in the meeting councillor Jeff Duncan expressed concern about spending $1 million on the project, noting the county is required to offer the services to any Ontario resident if Continuum of Care proceeds.
Several councillors also questioned a proposed $300,000 allocation from reserves for a gazebo, food preparation area, trail work and storage on the property of the Hillsburgh l
economic development to that area.”
Some additional staffing is anticipated in 2019, including the addition of a climate change coordinator in the planning department. The new position would work on a two-year contract, with $125,000 covered through provincial grant funding over the next two years, leaving the net cost to the county at $46,000 annually.
Other changes to the planning department include the addition of a senior planner in April and another planner in June. DeHart indicated these changes would be covered by increased planning application fees.
“We did an extensive review of the planning application fees in the course of 2018. A consultant’s report was done. We decided to move to full cost recovery for the planning area and that is expected to generate additional revenue of just under $600,000 in 2019,” DeHart explained.
“And as a reminder, those are the direct fees that the county charges to our developers. This does not represent the charges that we charge our local municipalities.
“That would be a Phase 2 of this and we’ve given some initial indication to our municipal partners that we are planning on increasing those fees, but we’re giving them some time to increase their own fees to the development community so that they can recoup those costs.”
The proposed budget also contains a provision for councillors’ salaries to be “grossed up” to offset the loss of a federal one-third tax free allowance, allowing councillors to maintain the same net pay. The move, approved by county council in November of 2017 will have a $190,000 levy impact. DeHart noted the changes to the tax code meant it would have cost the county over $50,000 even if no action was taken by the county.
The 10-year capital projects list for the county includes a concept plan for the expansion of the administration centre in Guelph in 2028. DeHart stressed the projected cost of $21.1 million is a “high-end estimate” and the proposal is just a concept at this point that is included “in the 10th year of a 10-year plan.”
Redevelopment of five ambulance stations over 10 years is also planned, with a sixth project planned in Harriston just outside the 10-year window.
Other stations on the schedule include:
– Erin in 2019-20, $1.5 million;
– Guelph-Eramosa, 2021-22, $1.5 million;
– Arthur, 2023-24, $3 million;
– Drayton, 2025-26, $1.5 million; and
– Mount Forest, 2027-28, $1.5 million.
Budget discussions will continue at committee meetings over the next few weeks, with a revised budget to be presented for consideration to county council at its Jan. 31 meeting.
White urged councillors to focus on making any changes at the committee level.
“This is us. This is our budget. We’re responsible for it,” he said. “Part of the way this committee structure works is if you’re sitting on committee, in order to get this budget down, that’s where you do it.”
