As Centre Wellington prepares for 2018, a town hall budget meeting was held on Nov. 1.
Mayor Kelly Linton stressed the focus of the meeting was the 2018 budget and the need for prioritized spending.
“We want to get people’s thoughts and input into the budget process,” he said.
The 30-plus community members gathered included all of council, members of the senior staff and department heads and Wellington County councillor Rob Black.
Linton said “the budget is the third most important job as town council. The only things more important are the strategic plan and community engagement.”
Linton noted, “We are faced with some significant infrastructure challenges here in Centre Wellington.”
He stated the township is huge, spanning 408 square kilometres, with 108 bridges and 912km of road supported by less than 30,000 people.
“It’s a small population to support a significant infrastructure.”
In Centre Wellington, Linton said there are currently 15 closed bridges with another 11 at risk.
He added the township’s professional asset management plan (updated in 2016) recommended a 4.9% increase in taxes every year until 2030; and a yearly 2.89% increase from 2031 to 2036.
“The bottom line is that we need to invest your tax dollars in our backbone transportation infrastructure,” Linton said.
The mayor then explained that while the township collects all taxes, “we only keep about 26% of it.” He added 57% of the total tax bill goes to the county and the remainder is directed to the school board.
Linton also reviewed the relationship between strategic plans and budgets.
He said he considered strategic plans the “best tool” councils have to direct staff to spend money and allocate resources wisely. Linton added this allows council “to not simply respond to the loudest voices in the community.”
He said the strategic plan was created as a result of extensive community feedback and council-approved action items tell the community what will be done with tax dollars in the current council term.
By providing clear direction to staff, Linton said it protects council “from making knee-jerk, short-sighted decisions.”
He said previous survey results revealed the top two priorities residents are willing to pay more taxes for (over the rate of inflation) are repairing/replacing roads and bridges.
Linton said it is the role of staff to manage the business of the township, while council’s role is to govern.
Linton voiced concern over comments made regarding cost overruns by the municipality, specifically that there has been $2-million in cost overruns and that costs have spiraled out of control.
He explained numerous steps are taken from the original bid estimate to a project’s completion, each of which require council approval before moving forward. In certain cases, these projects require community consultation.
If project estimates are over budget, council will decide whether to postpone a project or find additional funds to support the project.
Linton said the same holds true when bids come in. The mayor added contractors must complete a project within their bid price – unless something significant occurs, and even then, it would need to return to council for a decision.
Costs versus estimates
Linton said there are two reasons project costs can be higher than initial estimates, including as a result of community consultation.
At that time, the project would need to go back to council for a decision on whether or not to move forward with it.
“It does not represent an overrun, or costs that are unaccounted for … it means it has to go back to council,” said Linton.
“The second time where you see a cost overrun is where you tender out a project and you get back bids which are way higher than anticipated.”
Even then, it would still need to go back to council for a decision, Linton said.
“So it doesn’t represent a cost overrun, it means the earlier estimate was too low, and even though you are taking the lowest compliant bid, the cost is still higher … and council has a decision to make.”
Linton said there are a few areas where this happened in 2017.
Linton contended there are numerous government projects happening right now, and as a result, companies are able to charge more for their work.
He stressed this is not just a local issue and that all municipalities are seeing cost increases on large scale projects.
Linton said a second potential for increased costs is a result of community engagement.
On certain projects, such as the Victoria Street and St. David Street bridge projects, “the public wants more features.”
Linton added “these are two key bridges in our downtown cores.”
Some of the suggested enhancements included special lighting, stonework, belvederes, etc.
He said such items added costs over and above a simple replacement.
Linton said there are also unanticipated extra costs which drive costs up.
In focussing on the Victoria Street and St. David Street bridges, Linton clarified that neither bridge has gone to tender.
“As a result, there is no cost overrun, but the expected costs are higher than what we anticipated.”
The projected cost for the Victoria Street bridge is about $1.8 million, while the budget estimate was $1.1 million.
In providing options for council, Linton said staff, in conjunction with the project consultant, undertook a value engineering review to potentially review some key features to reduce costs – “and still be true to the overall design – and squish it into a $1.1 million budget.”
Instead of simply agreeing to the recommended changes, Linton said council is choosing to hold an additional public meeting to show different options – to either stay within budget or spend extra money on the bridge.
He said the difference with this project is the concept was to pay for it through the MacDonald Trust Fund without tax dollars.
Regarding the St. David Street bridge, Linton said the project received $2.2 million in provincial funds with Centre Wellington to pay the rest.
Linton said the original estimate was $2.53 million while the current estimate is significantly more, at $3.9 million.
He stated construction costs are up $290,000 and $388,000 is being attributed to bridge enhancements “to make it a special looking bridge for downtown Fergus.”
Linton said if money is found within the two per cent capital levy, it would mean cancelling a bridge project scheduled for the coming year.
He said council hopes for successful discussions with Wellington County and the province for additional funds based on increased construction costs – not the enhancements.
He stressed, “these are not cost overruns, the detailed estimates are above the original estimates.”
In addition, neither project has gone out to tender.
“The project has not started so there are no cost overruns.” Linton noted there were four other bridges in Centre Wellington which came in over budget as well.
Some of this resulted in the township pushing off other work – because of the importance of the bridge projects.
Linton then spoke on the budget process.
The township has already held one pre-budget discussion meeting. Linton referred to the township’s budget allocator survey (open until Nov. 12) to allow online input.
Prior to Nov. 17 at 4:30pm, residents can register as a delegation to present at the township’s committee of the whole meetings.
Operating and capital budget discussions begin in early December with the intent of passage before Christmas.
Questions
Prior to roundtable discussions with members of the public, Linton took some questions from the floor.
Bruce Lloyd questioned the difference between the St. David Street bridge estimates of $2.53-million versus $3.9-million.
Linton said there were a number of changes, including wider sidewalks, lookouts and stone-textured concrete. At the same time, base construction costs had increased by $290,000.
Other factors included attempting to widen the bridge within a limited area to undertake the work.
Lloyd said if the province was unwilling to offer more money – to cover increased base construction costs – “could we say we are going to close the bridge … it’s only 14,000 cars per day?”
Lloyd maintained the increased cost for the Fergus bridge is roughly 50% over the original budget.
Linton said the intent is to continue further talks with the province and Wellington County.
Councillor Stephen Kitras said council was presented information about bridge costs in July and council would need to make choices as to whether or not to move ahead with certain projects.
He then questioned why the same thing did not happen with the Victoria Street bridge when the costs came in along with costs for the West Mill Street construction.
Linton suggested that was a council-related question, not a town hall-related question. Linton said staff provide the best options for every project and then, “It is up to council to make decisions based on that information.”
Linton said in 2018 council will need to review how project costs are estimated.
“Neither council nor staff want to see estimates which are too low,” he said, adding this was the first year of significant community consultation on two downtown bridges.
Linton added the community consultation input will also need to be tempered with fiscal restraint.
“We don’t want to promise the world and then have to pull back,” he said.
