Centre Wellington property owners may be facing a 4.51 per cent increase or $41 to the local portion of their tax bills this year.
This week Centre Wellington councillors took to the task of finalizing the 2015 budget in their review of the operating budget for the coming year.
Earlier this year, Centre Wellington approved its $10.7-million capital budget ($8.1 million tax supported and $2.6 user pay).
At the meeting’s outset Mayor Kelly Linton wanted to place this year’s budget discussion into context.
He said the township is once again facing significant reductions through the Ontario Municipal Partnership Fund (OMPF).
Linton said Centre Wellington has been staring at a massive infrastructure deficit for years.
“We’ve been in wishful thinking mode for too long – hoping for funds from the provincial government. That’s just not going to happen.”
Similarly people have waited for the local economy to explode “that is just going to take time.”
While Linton had high hope for local economic initiatives, he said focussing on wishful thinking is not a sound business practice.
“We’re not going to be rescued by the province. The province as you know is in dismal financial shape and they are not going to hand out to municipalities much more funds in the near future.”
As a result, “we have to get our own economic house in order.”
He said, “The proposed 2% capital levy is a bold step to take responsibility for our own infrastructure.”
The proposed 2% amounts to $18 per year (based on average household assessment) enables the township to address its crumbling infrastructure over the coming years.
He said that move would help wean the township off the reliance on undependable outside funding without increasing municipal debt levels.
Linton said, “Citizens have made it clear they want us to look at our infrastructure … to fix the roads and bridges.”
The township currently has eight bridges closed, with more slated to be closed in the near future.
Staff have identified a prioritized list of roads and bridges to be rebuilt over the next 10 years, including five of the currently closed bridges and eight of bridges currently listed as being “at risk of closing,” Linton said.
Linton added the levy will allow Centre Wellington to build up a capital reserve to pay for those projects and buy financial stability and sustainability for the community.
“I’m not thrilled with having a 2.5% operating increase. I know staff have worked really hard to get down to this number.”
He said if any options arise during formal budget discussions, council would consider them.
He thanked staff for “not playing games, and coming forward with something that is reasonable … and not a game of staff versus council anymore.”
Centre Wellington Chief Administrative Officer Andy Goldie said the 2015 operating budget provides a new option for council to consider to move forward to a stronger financial footing while ensuring that infrastructure is properly maintained and also continuing to maintain existing levels of service to provide the quality of life residents are used to.
“Staff fully recognize some of the decisions to be made are not easy ones,” he said. “But we do have to have these discussions.”
While the proposed 2.5% increase is close to “cost of living” increase, when one takes into account the reduced Ontario Munucipal Partnership Fund’s grant of 20%, the proposed 2015 tax increase is just over 1%, Goldie said.
In speaking to CAOs and administrators of other municipalities, Goldie commented that Centre Wellington is not alone in dealing with crumbling infrastructure and declining funding.
The answers were all similar: “As a lower tier municipality there are very few revenue tools to finance our operations and services.”
However, until now, one key tool council had not discussed was the use of a dedicated capital levy to deal with infrastructure issues.
Goldie noted that staff have identified a list of roads and bridges to be re-built over the next ten years, including five currently closed bridges and eight that are at risk of becoming closed in the short to medium term if additional funding is not secured.
He said the proposed capital levy will allow the township to build up the its capital reserves to pay for those projects and provide financial stability for the community.”
Goldie also said staff had presented a project that could potentially reduce costs by $100,000 per year through the use of streetlight LED conversion.
That project is supported through a $232,000 grant from the Ontario Power Authority, coupled with a seven-year pay back program.
Though Centre Wellington’s over budget is roughly $31 million, Centre Wellington financial manager and deputy treasurer Mark Bradey explained the tax levy, including the proposed 2% capital levy, is $11,168,500 – about $482,161 above the 2014 tax levy.
He added that of the proposed 4.51% levy increase for the average home assessed at $318,330, the impact of the 2.51% increase to the base levy is $23.09 and the 2% dedicated capital levy amounts to another $18.35.
Bradey anticipated that adding in the county levy to the picture would bring the overall increase closer to $100.
Based on 2014 information, Bradey said that 57% of the residential tax goes to Wellington, 26% stays in Centre Wellington and the remainder is directed for local school board purposes.
In 1999, the split was 46% to Wellington County, 23% to Centre Wellington and the school boards got 31%.
Specific to 2015 operating budget Bradey explained the tax supported portion of the budget is close to $22 million while the user pay (water andsewer) is just shy of $10 million.
In a process that began last August, Bradey said staff went through every budget item line by line.
He noted that a January meeting sought out potential overlap and officials were able to reduce the budget by $180,000 – the impact being a reducton to the tax rate of about 1.6%.
Bradey said some of the funding challenges for 2015 include reduced government funding such as the OMPF is key.
“The government has clawed back another 20%, which works out to $152,900.”
Bradey added the township “tried” to reduce its dependance on taxation.
“We do that by giving the public a choice in user fees for particular services and the use of development charges. We also try to pursue grants when they are available. Plus developer contributions and donations also come into the mix.”
However Bradey said the township also must fund other items as required by provincial legislation, such as accessabiliuty standards and source water protection.
Bradey said the other challenge is funding the township’s current debtload.
When OMPF funds first came into effect they amounted to $1.5 million, but over the years that has dwindled to just over $600,000, Bradey said.
“It’s dropped roughly 60% since 2009.”
Capital budget financial assumptions typically rely on external funding sources that are unstable as political and economic changes occur in the province and in the country.
“The proposed capital levy will help to wean the township off its reliance on these undependable outside funding sources without increasing our debt level,” explained Linton.
The operating budget includes normal expenditures such as:
– Transportation and public works that keep people moving;
– Fire rescue services to keep people safe;
– Parks and recreation, waterworks and sanitary sewer to keep our communities clean and healthy; and
– Social programs and leisure activities to make Centre Wellington a great place in which to live, work and play.
As to final budget approval Bradey said “We are looking at approval of the budget on March 2.”
A copy of the 2015 Draft Operating budget is available for public review on the Township of Centre Wellington website: www.centrewellington.ca.
