Major capital costs taxing Wellington North budget talks

Councillors looking to staff to soften levy increase through budget cuts

KENILWORTH – This year’s Wellington North budget is proving contentious as councillors confront major capital expenses and the rising cost of living for residents.

Township treasurer Farhad Hossain last month presented council with a sobering draft budget that seeks to maintain core services levels and address taxing capital expenses.

The best-case scenario Hossain presented involves a 7% hike to the tax levy, with an impact to existing taxpayers of nearly 5% when predicted future growth to the tax base is considered.

At a March 6 meeting, council had a lengthy discussion propelled by Mayor Andy Lennox, touching on the year’s hottest subjects: a new outdoor pool proposed for Mount Forest, and capital projects to take on or delay.

“We heard a lot about the infrastructure gap,” CAO Brooke Lambert said, recalling feedback received last month.

“We still have quite a bit of work to do as a community to fill the backlog of needed infrastructure.”

Setting the stage for last week’s deliberations, the CAO said staff need direction from council on a desired tax levy, what capital projects to pursue, and how much of the township’s reserves should go to reducing new money demanded for projects or the levy.

Council talks roadwork

Councillor Sherry Burke provided the first comments, focusing on a need to pave Concession Road 4 North.

“We’ve heard for several years now, from the residents out there that they would like to have that road paved,” Burke said.

Operations director Matthew Aston said it had long been talked about, but staff believe it’s best served as a gravel road.

“We maintain it well,” he said.

“I would suggest that the residents that live out on that road have a different feeling,” Burke countered.

“It has generally been on the list, and the fact that it hasn’t even made the list, I can just imagine the phone calls I’m going to get.”

(Later in the meeting, councillor Lisa Hern mentioned she was not in support of spending cash on paving the road.)

Burke also questioned why larger capital projects, such as a new fire hall in Mount Forest, aren’t being seriously discussed, to which the CAO suggested they could be through ongoing growth management strategy work.

Councillor Penny Renken also brought up roads, suggesting Birmingham Street West (where it bends down to meet Queen Street West) and Dublin Street in Mount Forest are “in dire need” of attention.

Aston said the latter, between Queen Street West and Louise Marshall Hospital, is on this year’s urban paving program, and Birmingham will go on the radar.

Taxing workload

Considering the amount of carry-over projects included in this year’s draft budget — $7 million of $35.9 million in total proposed work — Burke questioned the township’s capacity to handle it all.

The township failed to complete a single budgeted bridge project in 2022, Aston admitted.

“That’s on me,” he said, noting his role as one of two acting CAOs for a portion of last year following the resignation of former CAO Mike Givens.

But the risk of not completing projects because of limited staffing remains, Aston warned.

“There’s money available to do capital projects, but sometimes there’s not capacity internally to do them,” he said.

Fiscal responsibility questioned

In councillor Steve McCabe’s absence, the mayor read from McCabe’s supplied remarks.

In a written statement, the councillor questioned the merit of a litany of proposed spending, on everything from new vehicles to traffic lights to fire department equipment.

(Burke sided with McCabe’s apprehension on vehicle purchases, saying she would have a “really hard time” supporting the asks – she’s “still waiting” on a previously-requested review of the township’s fleet.)

McCabe took issue with the township paying for much of the traffic signal infrastructure to be installed at Main Street and Mount Forest Drive in Mount Forest near a new Foodland grocery store, valued at $525,000.

Hossain clarified the township is on the hook for $405,000 after a $120,000 contribution is included from the nearby Canadian Tire development.

Speaking to the merit of a road needs study, Aston said township roads account for around $375 million in assets, “so the idea of spending $70,000 to better understand them and their replacement needs … makes a lot of sense.”

Spending on fleet could be reduced, but Aston warned the township would fall behind in keeping its fleet maintained and up-to-date, resulting in significant costs later on.

Wellington North and Minto Fire Chief Chris Harrow defended the need to replace the fire department’s breathing apparatus equipment because of new National Fire Protection Association standards requiring new bottles with a 45-minute air supply to replace those lasting 30 minutes. A new air compressor is also required.

“Unfortunately, this is one that we have to bite the bullet [on] and do it all at once,” Harrow said.

The Mount Forest outdoor pool generated an unusually unguarded and lengthy discussion among councillors (see related story.)

Councillors seeking budget cuts

Even a tax rate increase of 6.8% in line with Ontario’s 2022 inflation level will be “painful” for residents, the mayor said, but the increasing costs of running the municipality, delivering services, and a widening infrastructure rift are a reality.

“I don’t disagree that the tax levy needs to go up from prior years,” Burke said, adding residents are also strained by higher costs.

“I’d like to see it around 4.5 to 5 per cent,” she said.

“Somehow,” Hern said, she wants the budget trimmed to soften the rate increase.

But from where she wasn’t sure, suggesting a “lawn mower or something” be removed.

But each per cent of the proposed increase represents $83,000, council was told.

“We need to give direction to staff … in terms of where we believe that can happen,” the mayor said.

Burke suggested not adding three proposed staff positions, which adds $286,000 to the levy, translating to at least a $44 increase on an average tax bill.

The CAO asked about council’s comfort level with attacking a levy increase by using reserves.

The township has significant reserves, but there are restrictions on what some of the dollars, such as those collected from development charges, can be spent on.

Currently the township has close to $21 million in reserves, according to the township’s finance director, but that balance could be drained by upwards of $5 million depending on what capital projects are approved.

Responding to the CAO’s question, Burke said it’s hard to say until it’s known how much a rate increase can be softened by removing budget items.

Lennox suggested deferring a costly capacity upgrade to the Arthur wastewater treatment plant.

“I know that initially staff had hoped that we should get to a final budget by [March 20]; I’m hearing some desire for some further discussion, so that original goal may not be quite possible,” Lennox said.

Staff will return with different budget options for council’s consideration at the next meeting.