Onwards and upwards

County council passes 2021 budget with 3.2 per cent increase

County taxpayers will have to pay $41.6 million in property taxes in 2021, up from $40.3 million budgeted, but not yet fully spent, in 2020. The tax levy—the amount of the County budget property taxpayers fund—will rise 3.2 per cent, a $1.3 million increase.

Despite the increase, and the implications for affordability in this community, council members were confident they could justify the increase to residents. Over the last decade, residential property taxes and water charges have both grown faster than real per capita income. Since property taxes are not directly related to the ability to pay, they can be a burden to some homeowners.

A REGRESSIVE TAX
The burden of property taxes is not the same for everyone within income classes. The elderly and those in low-income situations are the groups most frequently cited as burdened by property taxes. Homeowning families below the low-income cutoff, both elderly and non-elderly, pay property taxes that are, on average, higher than their income tax bills. This notion prompted some councillors to want to keep the tax increase modest, especially given the circumstances surrounding COVID-19. Others wanted to add a 2 per cent roads levy on top of the 3.2 per cent increase. Councillor Jamie Forrester believed that the tax levy ultimately takes more money from those who are able to pay it. “We have discussions about not doing enough for our local residents. Because they can’t afford it. They are trapped in this spot and they can’t get out of it. Unfortunately, the only way we can help them out is to have more money on the municipal tax levy,” said Forrester. “The people that have homes that are eight or nine hundred thousand. One million, One point four million. It allows them to make a much larger contribution to the tax levy to help finance some of these issues we have moving forward. It hits the higher priced homes much more and the higher priced properties to a much greater extent, which brings in a lot more money. The people sitting with $300,000 homes aren’t hit quite as hard,” he said. Councillor Bill Roberts disagreed, calling property taxes a regressive tax. “I have a fundamental disagreement with what is being proposed. I see property taxes as regressive taxes. That actually hurt the poor or the less able more than they impact those people like myself perhaps with larger disposable incomes,” said Roberts. “If we were really concerned about folks going through tough times, dealing with fixed incomes, perhaps we would have done some different decisions around motions that provide relief and support for those on fixed incomes and below the poverty line. But we didn’t. And we move on.”

THE BASICS
Operating expenses are budgeted at $60 million for 2021, up from $59 million in 2020. Capital spending is set to shrink from $11.5 million last year to $9.7 million in 2021. These funds are used for repairs, rehabilitation and reconstruction of things the County owns—assets including roads, bridges and buildings. Council also chose to continue with the levy for the Prince Edward County Memorial Hospital redevelopment of $372,000 per year.

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 by builders through connection charges, rather than property tax payers. The County waterworks utility plans to collect $8.8 million to fund operating expenses in 2021, compared with $8.6 million last year, a 2.3 per cent hike. It will spend $6.6 million in capital

The municipality will also start down a path to replace the Wellington water tower, as well as the Wellington wastewater and water treatment plants. The price tag to replace the water tower is over $7 million, while the water and wastewater plants are $27.25 million and $23.5 million respectively. Several councillors asked how this would be funded. Peter Moyer, Director of Development Services told council that is still being worked out.

“As everyone knows, there is a large price tag to all this infrastructure and we have been in discussions with the developers about how we pay for this, what is their role, how much is growth related and how much is benefit to existing residents,” he said. In his report, Moyer stated the existing water tower has surpassed its useful life and needs to be replaced with a new one. Additionally, in order to facilitate growth in Wellington, a new tower would be sized beyond Wellington’s current population. A new wastewater treatment plant is being recommended to handle current excess flows as well as projected flows for future growth. Both existing plants would be demolished, and the new facilities housed at the same site. The finish date for both plants is estimated in 2024. Four point seven million dollars in spending toward preliminary work, including the $3.5 million for the Wellington Water Reservoir replacement, is in the budget for 2021, which will all be funded through reserves. CAO Marcia Wallace did state that a portion of the projects will be need to be debt financed.

Water and wastewater rates are expected to increase in 2021. Director of Finance Amanda Carter told council that effective January 1, the monthly water base charge will increase from $31.26 to $32.29. The water consumption rates will increase from $2.61/m3 to $2.79/m3. The wastewater monthly base charge will increase from $42.94 to $43.84. The wastewater consumption rate will remain the same.

TRUCKS AND SUCH
The County will spend $1.2 million on vehicles in the 2021 tax year. Two years ago, council approved a plan to bring some of its winter plow routes in house. This means outfitting the municipality with new trucks; $660,000 will be spent on three new trucks with winter implements to support winter maintenance. The Prince Edward County Fire Department will also purchase a new pumper truck at a cost of $397,000. A new land ambulance at a cost of $150,000 will be purchased, as well as five new light-duty vehicles with a price tag of $190,000. It is important to note that over the next seven years, the Fire Department is hoping to start replacing five 2000 model vehicles

ROADS
The always hot topic of County roads was at the forefront of budget discussions. Of the $9.7 million capital budget, $6.2 million is allocated to roads and infrastructure. A rehabilitation of Picton Main Street, from Bridge Street to Spencer Street, is in the works for 2021. Picton’s current Main Street infrastructure is now 70 years old and has reached the end of its life with a deteriorating road and underground services. The project will cost $3.1 million, and will be completed using Federal Gas Tax funding. $2.4 million will go towards the rural road surface maintenance program. Earlier in the week, Councillor Janice Maynard made the point that if residents knew they were paying a little more to go towards roads, they would be happy to do so. So, during the final deliberations, Maynard attempted to add a 2 per cent roads reserve levy onto the tax rate. “To ensure that our roads don’t fall further into a state of disrepair, or in fact, in the near future, to make some headway. And also if we ever want to see County Road 49 rehabilitated, I suggest that we need to continue to increase our roads reserves,” said Maynard. “I’ll suggest that over many years in the County, a desire to have very modest low tax increases is probably why we are where we are today with our infrastructure deficit.” The motion lost, which prompted councillor Jamie Forrester to try for a one per cent roads levy, which also was defeated.

Moyer told council that he hopes to have asset management software in place next year which will help with long-term planning to address roads based on level of need.

COVID-19
The County will continue to suspend penalties and interest on unpaid property taxes and water and wastewater bills until April 30, 2021. Council directed staff to draft a report exploring the development of a program to assist community members economically impacted by COVID-19 shutdowns and public health measures. The program would look at helping residents navigate tax and benefit programs provided by other levels of government. The municipality will also continue to offer access to large municipal buildings at no cost to not-for-profit organizations and public health groups to host events or activities within public health guidelines.

OTHER BITS
Other significant items in the 2021 budget include the Shire Hall renovation, priced at $300,000 and the Crystal Palace restoration at $279,000. Council was told that the Crystal Palace is falling into disrepair, with over 80 per cent of the building experiencing rot. A three phase restoration will be implemented. The Picton Youth Park will also need work to receive a new surface at a cost of $55,000. This surface has failed a third party inspection since year one of installation. If the surface is not replaced, the inspector has recommended a full closure of this play space for liability reasons