While OLG funds have a considerable impact on Centre Wellington finances, councillor Fred Morris believes the township should not be reliant on them.
During day one of budget discussion on Jan. 24, Morris asked if staff had discussed the pros and cons of funding sources such as the OLG when preparing the budget.
“Would it create any tax savings for the ratepayers if perhaps some of that OLG funding was directed towards the capital debt?” Morris asked.
If that cannot be done, Morris asked if part of the OLG funds could be directed to long-term investments.
“I’m just questioning the traditional wisdom, which says we have to spend all of the OLG money … (the) year after receiving it,” he said.
He asked if staff had looked at alternative means of handling that money.
Centre Wellington deputy treasurer Mark Bradey said in terms of using OLG funds towards capital debt repayment, “all of our debt is capital debt.” The issue is debt payments are paid through operating budgets.
If the OLG money is removed, there is a gap in the budget and Bradey asked where that money would come from. “It either has to come from tax increases … or another reserve,” he said.
Bradey estimated there will be no gap in debt payments until 2023. The hope is that OLG funds are sustainable until such time, but that is also the reason the township holds back spending for one year on the OLG funds.
Morris asked if somewhere down the road the OLG slots money is not there, “What then will be our contingency plan?”
Bradey said that is why OLG money now only goes towards the capital budget. As to township’s fallback, he said, “I don’t think anyone has come up with an answer”
Bradey said the OLG funds amount to $2.1 million, equal to “a 20% increase to the tax rate.” He said there is a significant risk relying on those funds.
