Even with much information to be finalized, councillors here are trying to nail down priorities and expenses for the 2016 township budget (capital and operating).
Some of the discussion is happening in advance of a town hall style budget meeting open house on Nov. 19 at Aboyne Hall from 7 to 9pm.
At the pre-budget committee of the whole meeting on Nov. 9, Mayor Kelly Linton offered a few comments at the outset of the meeting.
“I know municipalities across the country struggle with budgets, it is not an easy thing, and this will be no exception to that,” said Linton.
He noted there have been changes to the budget process, but he believes the quality of the budgets in the past few years has been exceptional.
In some places, Linton said the budget process is a case of “staff versus council – where staff come in with a budget which is ridiculously high and then it is council’s job to say ‘that makes no sense’ … then magically within a few meetings the numbers are close to where council wants the numbers to be.”
Linton said Centre Wellington has gotten away from that process, which he attributed to a smaller management team and stronger administrative leadership.
“I’m convinced the budget is a role for the committee of the whole, for all of us to have input into the budget.”
He stressed the two pre-budget meetings were to get information to council prior to its capital and operation budget discussions.
Linton said the public town hall meeting later this month will give more opportunity for input.
“We are taking leadership by taking responsibility for our own challenges,” he said.
“Instead of blaming the province, we’ve moved ahead with a 2% dedicated capital levy … if the township continues this we have the capability of rebuilding 16 bridges by 2025 – for an additional average cost of $114 for 10 years.
“It’s never fun to raise taxes, but we have an infrastructure deficit and this is a real plan to address that.”
Linton said “we can’t just look at raising taxes, we need to look for other sources of revenue … and it is time to move forward with this.”
He noted economic development also provides a stream of non-taxpayer generated revenue from the private sector to help reduce dependence on residential taxes.
He noted the township is also developing an inventory of employment lands.
“We have to do whatever we can to make sure we are promoting business in Centre Wellington.”
While the township will continue to apply for grants and funding from upper tiers of government, Linton noted that as of last week, another application for infrastructure funding has been denied by the province.
As to the rationale behind that denial Linton stated the reasons cited included:
– total weighted property assessment per household;
– median household income;
– average net financial assets per household; and,
– average residential property taxes, user fees, service charges per household as a percentage of median income.
“What the ministry is telling us is that we have room to get more money from our residents before they are going to help us out,” Linton said
“We have to come up with our own solutions to the challenges which face us.”
CAO Andy Goldie noted this is the first year of council reaching out to the community through both its pre-budget meetings and the town hall meeting on Nov. 19.
The plan includes having the capital budget finalized by December, with the operating budget to be finalized by February. Staff is currently preparing the operating budget based on current levels of service as well as a reasonable rate of inflation.
Alternate revenue streams
Goldie said staff has spent considerable time on the issue.
He noted the province is currently reviewing the Municipal Act which sets out the legislation under which a municipality operates.
The act also sets out municipal revenue tools such as property taxes, fees and charges, investment income, area rating, local improvement charges and development charges.
“Staff is actively pursuing these options for alternate revenues and will be providing council with this analysis in the coming months.”
He said the province is also reviewing the Development Charges Act.
Also being examined closely is the City of Toronto Act which gives the municipality new revenue tools including land transfer tax, billboard tax, vehicle registration tax, admission tax to place of amusement, tax on liquor purchase for use or consumption, tax on producing beer or wine in a brewing facility and tax on purchase of tobacco.
“It’s very clear that these are all new taxations on various types of services.”
He noted that part of the problem is that not all municipalities would be able to implement these options because of resources plus any new options will result in groups coming forward advocating those changes not be implemented.
Other options include sponsorships and naming rights.
Goldie said there are exciting things going on in the community thanks to community volunteers who support a number of activities within the community.
“Those efforts save substantial money for the community.”
He estimated the direct impact is the equivalent of over 10 staff positions.
Goldie stressed that amount does not take into consideration the volunteers working for other community events, Sports groups or other arts and cultures venues who put in hundreds of thousands of hours each year to support the quality of life in the community.
Financial manager Mark Bradey provided a detailed accounting of proposed costs and expenditures impacting the 2016 capital budget.
2016 Capital Budget
Bradey said staff is anticipating a minimum of $3,587,000 is available to fund capital projects annually. Sources of this capital funding include:
– taxation ($700,500),
– gas tax ($811,500), and
– OLG Slots revenue ($2,075,000).
Bradey said, based on development charges cash flow projections, between $750,000 and $1,000,000 is estimated to be available annually to fund growth-related projects.
Bradey noted that this is the first year for consideration of a three-year capital budget approval and a seven-year capital forecast (10 year total).
He explained this means the 2016 capital projects will be approved by council and the 2017 and 2018 capital projects will have preliminary approval.
He said priority capital projects will then move forward with design and tenders prior to the year of construction to take advantage of favourable construction pricing.
Bradey said one of the key factors is that it also sets the foundation for a three-year operating budget.
“We’re looking at doing that in 2017.”
“The development of three-year capital and three-year operating budgets just makes good financial sense,” Bradey said.
He said the move lays a roadmap for future projects; identifies areas of opportunity and risk; communicates the direction to the community; takes advantage of favourable construction prices; and stimulates discussions regarding the long term impacts of decisions made today on future services as well as operational challenges moving forward.
He noted that in December 2014, an Asset Management Plan was presented to council, outlining a need for an additional $9.3 million per year to address Centre Wellington’s infrastructure deficit.
These do not include water and sewer costs.
Bradey said the plan proposed by Watson & Associates was for a 5.05% tax increase per year to 2032 to meet road, bridge and culvert replacement requirements.
He said there are many other projects with potential infrastructure deficits including community facilities, parks, recreation and other equipment to be replaced.
“There are some particular challenges coming forward in the area of parks and recreation,” he said.
Bradey outlined items tied into the council’s priorities and initiatives for 2015 to 2018.
One of those initiatives was to replace four bridges by 2019.
He said recently four additional bridges were closed bringing the total to 12 bridges closed in Centre Wellington.
Bradey said there are a number of municipalities using or exploring the idea of using capital levies to deal with the infrastructure deficits
“We are recommending continuing the 2% capital levy for a maximum of nine additional years (2024) or until a maximum of $2.86 million in annual and sustainable revenue is available for bridge replacements within the township’s capital budget.”
Bradey said overriding assumptions include the current Ontario Community Infrastructure Fund (OCIF) formula-based funding program or any other upper level of government annual and sustainable revenue stream that may materialize.
Centre Wellington’s managing director of infrastructure Colin Baker explained there are currently 12 closed bridges in the township – not including the Victoria Street bridge in Elora.
His charts also indicate proposed years for the bridges to be rebuilt.
Baker said there are another six bridges considered at risk of either closure or future load restrictions – such as the St. David Street (Hwy. 6) bridge which sees considerable traffic.
Current overall plans are to rebuild or replace 15 of the bridges, Baker said noting that the Eighth Line bridge is currently under construction and should be completed later this month.
Goldie noted the province committed to restoring the Connecting Link program in 2016, however, program details, funding formulas, etc., are unknown at this time. Staff has been advised details will be forthcoming in 2016.
Goldie said staff will continue to lobby upper levels of government for additional annual and sustainable infrastructure funding.
He added that staff will continue to seek out upper level government grant applications for infrastructure replacement. It should be noted, however, these grants are typically one-time funding and do not provide long term annual and sustainable funding to the township. One of the projects recommended to move forward with in 2016 is the rehabilitation of the Irvine Bowstring Bridge.
Goldie said council has designated it as a heritage bridge and the proposed cost is now set at $890,000 which includes bridge work to address grading, drainage, roadside safety issues as well as concrete preservation which will extend the useful life of the bridge.
In the enhanced road re-paving the recommendation is to increase funding to $175,000 in 2016 and to have it increased to $300,000 by 2019.
In the area of healthy growth for the community, council intends to complete its growth strategy and undertake a transportation master plan.
Goldie noted that funding in 2017 has been increased to include the review of a community bus system.
Goldie anticipates township social media platforms to be launched in 2016 along with livestreaming of council meetings in the coming months.
Additionally, the proposed purchase of Citizen Budget software to further engage members of the public in the budgeting process.
Other key items in the preliminary capital budget:
– Long Term Water Master Plan
– Class/Active Net software upgrade
– Cityview Software Implementation
– Administration office HVAC upgrades – ($195,000)
– Video surveillance at various locations, and
– Victoria Street Pedestrian Bridge (Elora) – $1,000,000 in 2017
