Hard numbers

Building reserves given priority over cutting taxes

With the oath of office still fresh in their minds, the new County council sat down this week to begin poring over the draft budget for 2015.

For the first time ever, the proposed tax levy has crested $31 million—more than three times the amount extracted from County households in 1998, (the year the County was amalgamated). In the intervening years the population of Prince Edward County has barely budged—growing by just six percent over the last 17 years.

This means the average resident is bearing about three times the tax burden than 1998.

The average tax levy per person at amalgamation was $433. Next year—should council adopt the budget before them—the municipal tax levy per person will rise to $1,227 (based on the 2011 census of population).

Meanwhile, user fees have escalated in lock step with property taxes—from $3.7 million in 1998 to nearly $11.6 million in 2014, down slightly from $11.9 million collected last year.

The near term trend offers little comfort. Since 2011, the property tax levy has increased by 30 per cent. User fees, over the past five years have levelled off due to reduced planning and development activity and lower revenue collected from the County’s waste managment operations.

OPERATING REVENUES
The County is taking another big hit in its funding from the province—the County’s portion of the Ontario Muncipal Partnership Fund has been slashed by 13.6 per cent—translating into a $404,000 decline in this revenue.

OP EX
Operating expenses, after declining to $44 million in 2013 as a result of a structural reorganization of the County’s business, rose to $46 million last year and are expected to climb to $46.5 million next year.

Fully a third of the Op Ex budget is spent on transportation services, including maintaining, repairing and reconstructing roads and bridges. About a fifth is spent on fire and police services. Recreation and culture consumes about 11 per cent. Nearly 10 per cent of the 2015 Op Ex budget is being used to rebuild the County’s reserve base.

The headline item in the operating expenses budget is a $710,000 decline in police services costs—resulting from a new police funding model implemented earlier this year. The County has added the full-time equivalent of five people (three to the roads and winter maintanance crew) driving a 3.9 per cent ($611,000) increase to the County’s wages and benefits expense.

CAP EX
Capital expenditures (money spent on mostly hard assets such as roads, bridges and buildings) are being held at about the same level as the past two years, despite calculations produced by the County’s finance and public works staff that point to the need to spend about $38 million per year simply to maintain its infrastructure in current condition. For 2015, the County intends to spend about $10.7 million. Fully half of the 2015 cap ex budget is earmarked for roads and bridges, a quarter will be spent on buildings, with the remainder used to invest in land, vehicles, studies and IT gear.

Major new projects include the new fire station in Picton—$1.8 million has been allocated in 2015 for the $3.9 million project. The County will spend $1.1 million to replace the Allisonville bridge, as well as $1 million for surface treating.

Likely to raise eyebrows around the council table is a plan to reconstruct Union Road at Mountain View—budgeted at $1 million.

The County’s works department is also looking to add another $500,000 to the pot to replace the culvert that will redirect the flow of Lane Creek through the village of Wellington. That raises the total amount allocated to this project to $1.7 million. The County is awaiting a review by the Canadian Department of Fisheries and Oceans before the project can proceed.

The draft budget also features $720,000 to fund land purchases to ease pressure for parking space in Picton and Wellington.

RESERVE REPLENISHMENT
The municipality will transfer almost $4.7 million to reserves in 2015—an increase of $305,000 over the 2014 budget. Since 2011, the municipality has set aside an increasing amount of money each year to fund the capital renewal of a variety of assets including roads, buildings and protection services equipment. Previously, the money needed to replace or repair these longterm assets was taken from operating expenses.

Council has set aside the entire week to review the budget.