For the first time ever, officials are projecting Wellington County’s five-year spending plan will exceed $1 billion.
Wellington County treasurer Ken DeHart offered the statement as part of draft budget discussions with county council on Jan. 9 at Aboyne Hall.
The meeting provided councillors an overview of the 2017 budget and the 2017 to 2021 five-year plan in advance of January committee meetings.
2016 Property Assessment Valuation Update
DeHart said Ontario property assessments are updated every four years, the most recent being the 2016 update, which reflects values as of Jan. 1, 2016. New assessments will be in effect for the 2017 to 2020 property tax years.
DeHart said increases will be phased in over a four-year period, while decreases in assessment take place immediately.
The assessment change also results in shifts of the property class and municipal shares of Wellington County taxes.
He noted that farm weighted assessment is going up 0.69% to 6.19% share of the tax bill. Meanwhile industrial weighted assessment is dropping 0.55% to a 5.28% share, due to the changes in gravel pit assessments.
DeHart noted the reassessment also changes each municipality’s share of the county tax bill.
“I would say this is a reversal of trend from the past several years, where the southern assessment was growing faster than the north,” he said.
This year Mapleton, Minto and Wellington North will be picking up slightly larger shares of the tax bill, while the Puslinch share has dropped by 0.66% to 14.7% of the county tax bill.
DeHart noted Centre Wellington’s share is once again growing – by 0.27% to 28.6% of the tax bill. He attributed that to Centre Wellington being the fastest growing area of the county.
Five-year plan
DeHart said last November the plan projected a 3.4% budget increase for 2017 and increases ranging from 3.9% to 4.8% for the years 2018 to 2021.
Since then, he said the county’s 2017 OMPF grant was cut by $368,000 from the 2016 amount, which translates to a levy increase of 0.4%.
However, assessment growth finalized at 1.24% – 0.65% higher than estimated in November – allowed for an overall levy reduction of 0.65%
In addition, DeHart said roads staff reallocated $200,000 net salaries and benefits to operating from capital.
As a result of these changes, DeHart said the projected 2017 tax increase now sits at 3.3%, with a range of 3.8% to 4.4% from 2018 to 2021.
He estimated 2017 operating expenditures and transfers will total $200.4 million.
DeHart added there is $163.4 million in capital expenditures planned over five years, including $31.6 million in 2017.
DeHart said capital projects over the next five years will be funded from the following sources:
– 56.2% from tax levy and reserves;
– $25.6 million (15.6%) through federal and provincial subsidies including;
– $22.3 million (13.6%) in new debt, of which $18.8 million is tax supported and $3.5 million recovered from development charges; and
– $7.6 million (4.6%) will be funded by development charges.
Projected long-term borrowing
DeHart said projects covered by the $22.3 million in new debt over the next five years include:
– the Hillsburgh library construction ($2 million) in 2017;
– hospital capital grants ($6.7 million) in 2019;
– various roads projects ($10.2 million);
– bridge construction ($4.7 million) in 2020 and 2021, including Bosworth, Penfold and Conestogo River bridges;
– Erin garage construction ($2 million) in 2020);
– growth-related road projects ($3.5 million) such as Wellington Road 124 passing lane and bridge widening; and
– Riverstown landfill compliance mitigation ($3.4 million) in 2020 and 2021.
Capital plan for roads
The county plans to spend a total of $95.6 million over five years on roads, bridges and culverts, including:
– $40.3 million in road construction projects;
– $35.7 million on bridges and culverts;
– $19.4 million in resurfacing projects;
– an additional $4.8 million for the rebuild of the Erin garage over 2018 and 2020, funded from reserves, development charges and debenture issue; and
– design for the rebuild of Arthur shop in 2020.
Operating budget
DeHart said $200.4 million is proposed for expenditures and transfers in 2017.
This is forecast to grow to $228.9 million by 2021, an average annual increase of 3.7% over five years, DeHart said.
“Our total projected spending over the next five years is over $1.1 billion – this is the first time we’ve reached that level,” DeHart said.
He noted that in 2017 a 1% tax increase/decrease would equal about $889,400.
Other highlights
DeHart said additional highlights of the five-year capital plan include continued spending on 1,189 social housing units and the construction of eleven new units at the Palmerston Affordable Housing.
Erin Mayor Allan Alls said in looking at a 3.3% budget increase, “There is nobody out there getting this increase. My people in Erin are facing a huge assessment increase, and it’s driving some seniors out of the community because they cannot face this kind of increase.”
Alls said he understands there are capital needs and things that need to be repaired, but, “I think we need to tighten down as much as we can in our operating budget.”
Guelph-Eramosa Mayor Chris White said it is also important to consider the federal and provincial governments get a huge portion of residents’ tax dollars, with only a fraction of the infrastructure.
“At the end of the day, it is the property taxes paying for the infrastructure and this imbalance is unsustainable,” said White.
He added, “While property taxes are very visible, when you add up income tax, gas tax and other taxes … it’s huge.”
White believed the upper levels of government need to be constantly reminded the pressure municipalities are under in the long term.
“They need to step up to the plate,” he said, noting the shrinking of grants is unsustainable.
Councillor Don McKay agreed with Alls that a 3.3% increase would burden local residents. He asked if $1 million in projected interest on county reserve funds could be used to offset the increase.
DeHart said the county not only has to think about current needs, but the long-term sustainability of the municipality.
He said the determination was made that the county needs reserves of roughly 80% of its tax levy. The treasurer agreed reserve interest is used to pay for certain capital projects – but said it is being used in a responsible manner.
Councillor George Bridge said municipalities have to continue to educate residents that local property taxes cannot cover the infrastructure deficit in this country.
While he said he is “all for looking at this further,” Bridge was hesitant to shortchange services and projects, noting, “Making small cuts is not going to change the world.”
He said he believes efforts need to be made to ensure the upper levels of government give tax dollars back to the lower tier to deal with infrastructure.
Councillor Shawn Watters said quick fixes do not fix the problem in the long term.
Councillor Doug Breen said, “The problem is that we are being expected to pay for things which were never intended to be paid for by municipalities … imagine if we didn’t have to pay for the OPP … or all the social service bills.”
Breen said the financial supports from the upper tiers have been stripped away. He agreed people and businesses are not getting increases of 3% per year.
The issue, he contended, is the role of municipalities has fundamentally changed.
“Where we are now is utterly unsustainable. Things are going to blow up if we don’t deal with this,” said Breen.
Councillors discussed various methods by which their concerns could be relayed to the federal and provincial levels of government.
As to the budget timeline, DeHart said the budget will be reviewed at the county committee level over the next two weeks, with recommendations coming to Wellington County council on Jan. 26.
