Two Centre Wellington councillors oppose $41 million budget; 2% capital levy

It wasn’t the overall $41-million capital and operating budget estimates, but a 2% capital levy that led to two Centre Wellington councillors opposing this year’s township budget.

On March 2, council passed its budget with operating expenses of $30,994,702 and further capital budget expenses of $10,637,940.

Few questions were raised about the budget itself; comments were about the capital levy – intended to address the township’s infrastructure deficit in the coming years.

Centre Wellington financial manager and deputy treasurer Mark Bradey said that for residents with and average property assessment of $318,000, the tax increase would be 4.51% or $41.44 on the township portion of the tax levy.

Councillor Fred Morris said he recognized the unique nature of the 2015 budget – in particular the 2% capital levy. He appreciated council’s struggle with the plan as they wrestled with the reality of the growing infrastructure deficit.

“There is no cavalry coming over the hill to help us.”

Morris said the province has sent out a clear signal that it is not ready to assist us and the federal government has not proposed new initiatives the municipality can look to for support.

Morris stated, “I am opposed to the 2015 Centre Wellington budget in general, and the 2% capital tax levy in particular, as a go-forward measure.”

He said the capital levy, “in my opinion, was hastily conceived and poorly researched following the October 2014 municipal election.”

Morris said councillors were told of the levy during preliminary operating budget discussions a few weeks ago.

“It never came up during the capital budget discussions (which had primarily been approved by that time.”

The justification behind the move was that other municipalities were taking that approach, he said.

“I fear we that we are merely using a one-size-fits-all mentality in solving the difficulties in Centre Wellington.”

“By ignoring the need for a thorough comparative analysis between municipalities, I feel we are simply looking for an easy solution for Centre Wellington’s infrastructure dilemma rather than the right solution.”

Morris added, “I am also opposed to this budget because the 2% capital tax levy demonstrates what I think is a complete disrespect for all the property taxpayers of Centre Wellington, by presuming upon everyone’s ability to pay higher taxes.”

He said, “The recent closure of the A. O.. Smith plant in Fergus put 350 people out of work. The coming closure of the newly minted Target store will shortly add another 150 people to the unemployment roll.

“As I see it, the haunting evidence of a growing problem of financial hardship for an increasing number of our residents is staring us coldly in the face.”

I believe this council was elected because it was thought by our residents that it was time for a change in personnel and an implementation of new ideas. High taxes is not just an old idea, it is a very bad idea and not one I want to be part of.”

Lastly, Morris stated the capital tax levy offers no clear direction on an exit strategy for when the capital levy would end.

“I wonder how many of our residents actually grasp the ongoing compounding effect of this tax on their property bill.”

He said, “We are looking at the equivalent of a small snowball rolling down a very long hill. The longer it rolls, the bigger it will become. I cannot in good conscience commit the residents of Centre Wellington to such an open-ended scheme.”

He said new taxes are quick fix solutions and justifications for those taxes are always easily found because the perceived need for more municipal revenue is obvious.

Morris said the problem is not with the township – but the province. “We’re being given a 19th century toolbox to deal with 21st century financial problems.”

Morris urged that council and senior staff, before they return to the table a year from now to deliberate on the 2016 capital and operating budget, review the feasibility of the “2% capital tax solution” and “carefully research the alternative measures that I proposed during the committee of the whole deliberations.”

He also suggested examining the possibility of using dividends from Centre Wellington’s 100% owned Centre Wellington Hydro; consider capping some of the municipality’s capital reserves and divert the contribution to them into the infrastructure levy; and to allocate some or all of the annual budget surpluses to infrastructure.

I believe now is the time for a new kind of leadership to emerge from this council – a leadership that is bold and innovative.

“It is time for a leadership who thoroughly researches its decisions and demonstrates clearly to the taxpayers of this community its unfailing commitment to them.”

Councillor Kirk McElwain also objected to the budget for many of the same reasons.

While thankful for certain steps being proposed, they do not impact this year’s budget or taxes.

He believes the 2% capital tax levy is a convenient way to raise money this year.

“I don’t see anything which will help us fix the problem without taxes.”

He said Centre Wellington needs to attract more business and residents. “That needs to be our long-term strategy, not raising taxes.”

He suggested raising taxes 4.5% for the next four years of council has a cumulative impact of over 20%.

“I can’t be party to a 20% tax hike in a short four year term.”

Councillor Mary Lloyd supported the budget.

She cited comments made during a town hall meeting earlier this year regarding the impact of closed bridges on the lives of local residents.

“It’s not easy to put this capital levy into place; that is why we’ve introduced strategies moving forward.”

She said there will be more discussion on the 2016 budget.

Lloyd believes the province is looking for other ways for municipalities to get alternative sourcing of funding.

“Centre Wellington is not alone in facing these difficulties.”

She said she understood the impact this increase will have on tax bills.

“Now is the time to begin the next steps in having more in-depth talks with the county regarding infrastructure shortfalls and the difficulties we are facing.”

Lloyd stressed that the capital levy is a one-year initiative.

Councillor Steven Van-Leeuwen supported the budget, “but obviously with a very heavy heart.”

VanLeeuwen said, “Nobody likes to raise taxes; it affects everybody around us.”

He said that levy is one of the first new ideas in regard to dealing with infrastructure needs.

VanLeeuwen said there are lots of infrastructure problems that needs to be addressed.

“If these bridges continue to close, our economic development will close as well.”

Councillor Steven Kitras favours the budget and said the capital levy is a good idea to deal with the infrastructure.

“People look at that when they are looking to invest in our community.”

He agreed the levy should have been dealt with during the capital budget discussions.

Councillor Don Fisher also supported the budget.

He said the matter of a 2% levy is a matter of great concern. “It is bold and aggressive.”

But for him the bottom line is, “It is necessary.”

Fisher said the municipality must work within the system that exists. “We have to do something and we have to start now. In my view it is absolutely essential we begin addressing our infrastructure deficit – we cannot wait.”

Mayor Kelly Linton said it was not easy introducing something new.

He believes, “At the end of the day we have a reality in front of us – that our roads and bridges need work. This 2% capital levy will go towards dedicated infrastructure projects.”

Linton said the time for upper level government handouts is over.

“We have to make our own solutions here in Centre Wellington, and it is not an easy thing.”

Linton said that levy is only part of the solution, and other avenues are being pursued.

He added talks are continuing with Wellington County, the province and federal government.

“In addition, there is a strategic focus on economic development. There is road and bridge work which cannot be pushed off any longer.”

Linton thanked Bradey for stick handling the process and providing council with the information needed.

He, too, stressed this is a one-year, not a 10-year budget.

Council later adopted the budget with Morris and McElwain opposed.