The county will experience a reduction in unconditional Ontario Municipal Partnership Fund (OMPF) grants in 2015, but four of the county’s seven lower tier municipalities will see increases.
That represents a change from 2014, when only two lower tier municipalities received more funding than the previous year.
OMPF was introduced in 2005 to replace the Community Reinvestment Fund (CRF) as the province’s main funding model for municipalities.
The total amount distributed to Ontario municipalities through the OMPF program has been cut from $650 million in 2010 to $515 in 2015 (down from $550 million in 2014).
Despite the cuts, the province contends it’s providing more total support to municipalities than has historically been the case due to uploading of social services and other costs.
“In 2015, the province will provide a total of $515 million in unconditional funding through the OMPF to 388 municipalities across the province,” states a letter from finance minister Charles Sousa and municipal affairs minister Ted McMeekin released with the announcement of the 2015 OMPF grants.
“This funding, combined with the municipal benefit resulting from the provincial uploads, will total more than $2.2 billion in 2015. This is three and a half times the level of funding provided in 2004 (under the CRF).”
By uploads, the province is referring to a transfer to the province of funding responsibility for programs such as social assistance benefit programs, Ontario Drug Benefits, the Ontario Disability Support Program and court security costs.
Lower tier municipalities, which didn’t pay directly for social assistance or court security, contend the benefit of uploads to them is minimal, but the province insists the uploads benefit all municipalities.
“The estimated total benefit of the 2015 provincial uploads for the County of Wellington is $4,764,100 which is the equivalent of four per cent of all municipal property tax revenue in the county,” states a line included under the heading “Highlights” in the OMPF allocation notices.
AMO disappointed
However, Association of Municipalities of Ontario (AMO) officials view it differently.
“AMO advocated for a deferral of the expected cut of $25 million for 2015,” the association states on its website. “AMO was extremely disappointed when the 2014 provincial budget included a cut of $35 million. AMO and municipal treasurers who were consulted on the fund’s 2015 design noted the ministry’s competing goals of stability for all recipient municipalities and targeting assistance for municipalities in greatest need within a declining overall funding envelope.
“Of the 388 municipalities which receive OMPF dollars, 245 will experience a decrease, while 143 will either have stable or increased funding.”
Wellington County’s OMPF allocation has been reduced from around $3.6 million in 2014 to just under $2.9 million in 2015, a cut of about $700,000.
However, on the county’s allocation notice, the province points out 2015 uploads, combined with the remaining OMPF funding “exceed the payments received in 2004 by just about $6.4 million.”
Wellington County Warden Chris White says uploading aside, the OMPF cuts are still felt when municipalities are budgeting to keep taxes down.
“If we’ve got a $700,000 hit this year, which is almost one per cent of taxes, we’re already starting one per cent in the hole and it’s cumulative hit … That $700,000 hits us every year for the rest of our lives and all of these cutbacks on the OMPF have done that.”
White says municipalities are continually being compelled to spend more money to implement new provincial regulations, at the same time they are absorbing funding costs.
He also pointed out the province is using a system of indexes to determine the relative wealth of municipalities when deciding how to distribute grant money, creating an uneven playing field.
“While I understand the idea of trying to help those who are in more difficulty, I’m not sure this index is exactly the way to go because in the county for example, to some degree, the south already subsidizes the north,” said White, who is also mayor of Guelph-Eramosa.
“They really need to come up with a standard way to give sustainable funding to all the municipalities in rural Ontario, consistently across the board. And this wealth re-distribution they’re playing at is harming communities because they think you have extra tax capacity when in fact you don’t.
“Now we may be better off than some communities, but in some cases those communities have been, to some degree, mismanaged – they haven’t taxed for what they need to pay for and so they fall behind and so they’re looked at as being in distress, so they take money from us and give it to them.”
Lower tier allocations vary
At the lower tier, Centre Wellington, Guelph-Eramosa and Mapleton will see less in OMPF funding than last year.
Centre Wellington’s 2015 allocation of $612,000 is equivalent to 6% of municipal property tax revenue, but represents a cut of $152,900 from the 2014 figure of $764,900.
Guelph-Eramosa will receive $442,400 in 2015, down $1,400 from the $443,800 it received last year. The new allocation is equivalent to 4% of property tax revenue for the township.
Mapleton’s allocation fell by $210,100, to $840,500 which is the equivalent of 20% of property tax revenue.
The towns of Erin and Minto and the townships of Puslinch and Wellington North will all receive more OMPF funding than they did in 2014.
In Erin, OMPF funding went up slightly, from $585,300 to $588,000 this year. The new allocation equals 11% of Erin’s property tax revenue.
Puslinch Township also experienced a small increase in their allocation, from $402,700 in 2014 to $404,600 this year, equal to 4% of property taxes.
Minto is slated to receive $1,532,500, up about $41,000 from the $1,491,400 the town received in 2014. In Minto, the OMPF allocation is equivalent to 35% of municipal property tax revenue.
Wellington North’s 2015 share is 1,088,700 – up nearly $23,000 over last year’s allocation of $1,066,100. The township’s OMPF funding is equivalent to 17% of property tax revenue.
Despite the reductions in unconditional grant funding through OMPF, the province maintains it is providing municipalities with ongoing support of over $3.7 billion in 2015, an increase of $2.6 billion from the level provided in 2003.
For 2015, the total ongoing provincial support, in addition to the combined benefit of OMPF and uploads, includes:
– $499 million in funding to support 50:50 cost sharing of land ambulance costs;
– $564 million in public health funding, which includes the upload of public health costs from a provincial share of 50 to 75%;
– $321 million in provincial gas tax funding for the 2014–15 program year; and
– $100 million in annual funding to small, northern and rural municipalities through the new permanent Ontario Community Infrastructure Fund (OCIF).
By 2016, the province says it will have increased ongoing support to municipalities to $3.8 billion a year, an increase of more than 250% compared to 2003.
However, White says these numbers don’t go back far enough to tell the whole story.
“I think what they need to do is go back before amalgamation, and if someone could break those out,” he suggested.
“They may have increased support, but that’s support to pay for things that should have stayed with the province in the first place … they take something that should be funded from the province, like ambulance, dump it on the lower tier municipalities then come back and give you some money and say, ‘Look, we’re supporting you’ – so I don’t know how far that washes.”
White points out the provincial uploads do help at the county level and that does benefit all county citizens by keeping taxes down, but it just doesn’t help fund services at the lower tier.
He also noted the pressure should ease to some degree soon, as the province’s goal of reducing total OMPF payments to a $500 million annual fund has almost been reached.
“It’s money we need,” said White. “For Guelph-Eramosa, you’re looking at almost $500,000 and when $55,000 is (equivalent to a 1% tax increase) it’s huge and I’m very appreciative that the province still provides that.”
