Wellington County records $7-million budget surplus for 2020

WELLINGTON COUNTY – County coffers are fuller than expected after ending 2020 with a surplus of nearly $7 million, thanks to a combination of budget adjustments and an influx of cash from upper levels of government.

A report from County of Wellington treasurer Ken DeHart explains the surplus of $6,962,000 represents about 6.6 per cent of the 2020 tax levy, or 3.9% of budgeted operating expenditures.

The report notes the surplus is “much higher than the county has historically experienced.”

It’s also substantially higher than the $680,000 surplus projected in a budget variance report presented at a council meeting last June.

“The COVID-19 pandemic had extraordinary impacts on the county’s operations and the federal and provincial governments stepped up to provide significant municipal funding to offset negative impacts experienced from the pandemic,” De Hart states in the report.

“The county also made substantial adjustments to its operations to mitigate impacts on the budget from the pandemic. All of these factors contributed to a larger surplus in 2020.”

DeHart added, “The federal and provincial governments provided the county with extraordinary funding to assist with impacts from the COVID-19 pandemic.”

The county has received nearly $3.8 million in unrestricted funding to offset pandemic impacts, ($2,311,900 of which was dedicated to 2020 expenditures) through the Safe Restart Agreement.

The funds helped compensate for

  • $877,000 in lost revenues from child Care, solid waste, Provincial Offences Act fines and library and museum programming due to the shut downs;
  • about $606,0000 in additional costs for cleaning, PPE , IT and remote work related costs, air quality improvements at county facilities, advertising, signage, legal costs, postage and security;
  • $335,000 for the county share of additional paramedic costs;
  • $343,0000 for staffing costs during the emergency shut-down; and
  • $150,000 in incremental social housing costs (cleaning, PPE, security) over and above dedicated provincial funding.

The report notes the county experienced reduced costs in numerous areas due to the pandemic related shut downs, which added to the surplus.

At the April 29 meeting, county council approved a recommendation that:

  • $2 million of the surplus be directed to the tax levy stabilization reserve;
  • $2.35 million be transferred to the solid waste services capital reserve to eliminate the debt for the proposed Riverstown leachate collection system; and
  • the balance of approx. $2.6 million be transferred to the Roads Capital Reserve to reduce the debt for the Arthur public works garage project.

“The county and their staff have done an absolutely stellar job in figuring out how to bring the reigns in during this period of uncertainly,” said councillor Chris White, who chairs the administration, finance and human resources committee.

“It’s a good news story in a sense that the budget has been well managed and we came through this without a crisis. The other good news about this is that $7 million isn’t going to go off into some reserve, or go to build something new, or begin something new. It’s going to be reinvested into things we’re already doing,” said White.

“So while it’s a surprisingly large surplus, it’s going back into exactly where it needs to go to help keep the tax rate down going forward.”

White added, “We’ve got a $7 million surplus, which is considerable. I know in we’re normally looking at one or two million and occasionally a little bit higher … but at the end of the day it’s really a by-product of unexpected funding.”

He noted the county “received almost $14 million we weren’t budgeted for, from where we were sitting a year ago.”

In addition to the $3.8 million in direct COVID-19 offset funding, White said the unanticipated funds included $922,000 for long-term care and about $10.6 million for various housing, child care and other programs.

Councillor Mary Lloyd noted the surplus may be needed to offset possible future pandemic impacts.

“We’re now into our third phase, or third shutdown. There’s lots of families that struggled through shutdown one and struggled through shutdown two and now were into another new year with a new set of property taxes,” said LLoyd.

“I hate to say this, but I foresee that we will be experiencing more default for sure as people are struggling financially.

“I’m glad that we are putting money into the levelling off of the taxes going forward.  I also recognize that we could be experiencing what might be record defaults on our taxes this year,” she added.

Councillor Jeff Duncan said, “I think that’s a terrific use of the surplus, being able to pay down things that we we’re planning to do.”

“I do agree with how the surplus is being spent,” said councillor Alan Alls.

“There’s only one taxpayer and if we can save them some money by stabilizing the tax increase it’s all the better for everybody.”

“Thanks very much to Ken and your team,” said Warden Kelly Linton. “Through this time it hasn’t been easy I appreciate the good work that you and your team have done.”

Linton added, “I appreciate also the provincial government coming through for us. We didn’t expect that so we need to give credit where it’s due.”

Financial reporting award

The County of Wellington has once again earned the Canadian Award for Financial Reporting from the Government Finance Officers Association of the United States and Canada (GFOA) for its annual financial report.

The award program was established to encourage municipal governments throughout Canada to publish high quality financial reports .

The recognition means the county’s reporting has been judged to meet the high standards of the program, including demonstrating a constructive “spirit of full disclosure,” states a press release from the GFOA.

At the April 29 Wellington County council meeting, councillor Chris White said the recognition is “another well-deserved award,” for treasurer Ken DeHart “and his team.

“I know we’ve consistently got these and it kind of becomes an expected thing, but it shouldn’t be,” said White.

“These are earned and it’s a product of a lot of hard work by our staff.”