Blistering tax increase

New council hikes tax levy by 8.62 per cent, largest dollar increase in County’s history

County taxpayers will have to pay $38.5 million in property taxes in 2019, up from $35.5 million budgeted, but not yet fully spent, in 2018. The tax levy—the amount of the County budget property taxpayers fund—will rise 8.62 per cent. This is a $3 million increase in one year, the largest dollar increase in the history of the County.

The budget includes nearly $2 million for new trucks, a special levy for roads of $930,000 and $372,000 toward the development of the new hospital in Picton.

When the County was formed after amalgamation in 1998, the tax levy was $10.3 million. It has risen at an average of 6.3 per cent per year ever since. Inflation over this time frame has averaged just 1.87 per cent. This means that cost of local government is consuming an ever-larger portion of residents’ income each year. At this pace, the tax levy will top $50 million by 2024.

Despite the hefty increase, and the implications for affordability in this community, some council members were confident they could justify the increase to residents.

“Let’s put this into real terms for people,” said Phil St. Jean, a new councillor in Picton. “The public aren’t going to like a tax increase, but we have to be realistic. I think if we explain it properly, they will accept it.”

FUN WITH NUMBERS
But in an attempt to put a positive spin on the numbers, Shire Hall may have only managed to confuse matters. Past councils have, for example, regularly made onetime, or even multiple-year funding contributions through its annual budget. These include municipal contributions to fundraising campaigns for Kingston General Hospital or diagnostic imaging for Quinte Health Care and the like. Occasionally, too, it will add one-time increases to its roads budget.

This year, however, Shire Hall is describing such contributions as special levies—and thus deducting them from the general levy. In doing so, it is attempting to turn an 8.62 per cent increase into a more palatable 6.3 per cent rise.

Shire Hall employs yet another method to improve the optics of its expanding maw. Each year about 150 new homes are built, and new taxpayers are added to the base. Shire Hall has, for many years, deducted this new tax base from the capital levy, as a means of simulating the effect of the tax increase on existing ratepayers. Other jurisdictions do it too.

This shell game might be tolerable in a growing community. The problem is that in Prince Edward County, even as more homes get built, the population is declining. The bottom line is that no matter how one slices and dices the numbers, the unassailable facts are these: 25,000 people paid the $10.3 million levy in 1998 either directly or indirectly through rents. And in 2018 roughly the same number of folks paid $35.5 million. This year they will pay $38.5 million, or $3 million more. That’s an 8.62 per cent increase.

THE BASICS
Operating expenses are budgeted at $54.4 million in 2019 (after deducting special levies of $1.3 million), compared with $52 million last year. Capital spending is set to shrink slightly from $15.7 million last year to $14.1 million in 2019. This is used for repairs, rehabilitation and reconstruction of things the County owns, assets including roads, bridges and buildings.

HOW AND WHY
The County plans to spend $8.6 million on roads and bridges this year, including the reconstruction of Talbot Street in Picton and a connecting link between Talbot and the Loyalist Parkway—facilitating new residential and commercial development slated for this area.

Much of these development- driven capital costs will be recovered through various fees to the developers and builders.

Other improvements include sidewalk lighting along County Road 22 (near Prince Edward Heights) and lighting enhancements at the intersection of Johnson Street and McDonald Drive in Picton.

WATERWORKS
Budgeting for waterworks—both operating and capital—is tabulated as a separate business. It is entirely funded by consumers through the water bill and builders through connection charges, rather than property tax payers.

The County waterworks utility plans to collect $8.1 million to fund operating expenses in 2019, compared with $6.3 million last year, a 28 per cent hike.

It will spend $7 million in capital projects, nearly half of this on a new water tower in Wellington. This tower is needed to enable development in the village—which has been constrained by insufficient water pressure. Again, this cost is expected to be recovered through fees and charges to developers.

SPECIAL
Council also approved a $930,000 roads levy on the 2019 tax bill. Councillor Janice Maynard presented the motion, which will see the funds be put into a roads construction reserve for the future. But council heard from its staff that reconstruction of a County road averages about $300,000 per kilometre. Considering the County has more than 1,100 kilometres of roads—all deteriorating at various rates—it is not clear council has done the arithmetic on how many years of special levies will be needed just to stabilize its road network.

Council also approved a financial plan to meet the $4.5 million commitment made to the redevelopment of the Prince Edward County Memorial Hospital. Staff had recommended that a provision of 0.8 per cent per year for the next 15 years be put on the tax bill toward the hospital redevelopment project. Councillor Jamie Forrester suggested that it be rounded to an even one per cent. Council supported his move. This will see $372,000 be set aside from this budget for the build.

TRUCKS AND SUCH
Council will spend close to $2 million on vehicles in the 2019 tax year. Late last year, council approved a plan to bring some of its winter plow routes in house. This means outfitting the municipality with six new trucks. Two were acquired last year, leaving four more to be purchased in 2019.

There are other items that are certain to raise eyebrows among taxpayers. Shire Hall will spend nearly $200,000 hiring a new bylaw enforcement officer and a fire prevention officer.

Several councillors said they had heard frustrations from residents regarding parking and marina enforcement. But others were increasingly unnerved by the expanding budget.

Wellington councillor Mike Harper sought to cut the two positions from the budget—at least until new short-term accomodation regulations were in place to help fund the expense. His motion gathered some support around the table.

I believe, as a council, people elected us for change,” said Hallowell / Bloomfield councillor Phil Prinzen. “There are nine of us new here, and now are looking at a tax increase before assessments of 8 per cent. I don’t think we’ve made any tough decisions. People aren’t always going to be happy but I do support Councillor Harper’s motion,” said Prinzen, a farmer and volunteer firefighter.

Fire Chief Scott Manlow and Bylaw Enforcement Chief Andy Harrison were invited back to the podium to strengthen their pitch for additional staff.

Councillor Maynard provided a lifeline.

Will another Fire Prevention Officer make the community safer?” asked the Ameliasburgh councillor.

Manlow swatted the softball across Main Street.

Harper withdrew his motion.

OTHER BITS
Council also approved a second year of the Farming Assistance Grant Program, which sets aside $40,000 in the 2019 budget. Just $11,399 was taken up through last year’s program, which also had a budget of $40,000. It is not clear, what happened to the unspent portion, or why this year’s allocation was set at this level again. Or, why the unspent portion of last year’s fund couldn’t be used to fund this year’s program.

Council agreed for a second year, to earmark another $250,000 toward addressing the issue of affordable housing in the County.

Council also approved annual operating grants of up to $50,000 to the Prince Edward Fitness and Aquatic Centre until 2022, as well as annual capital grant of $20,000 over the same period.

It also renewed the municipality’s agreement with The County Foundation by approving an annual operational grant of $40,000 through 2022. Under the renewed agreement, The County Foundation will now administer both streams of the Municipal Community Grant Program.