Heavy sledding

New Council works to forge a budget that residents can afford

"To cut $2 million we have to look at substantial areas - where we spend the most money. We have no choice." - Mayor Peter Mertens

“We just can’t continue to hand our problems over to the taxpayer,” said Mayor Peter Mertens in response to the first draft of the municipal budget. Billed as a status quo budget, the proposal would have added $2.3 million more to deliver the same services as last year ($1.5 million for an increase to operating costs and $0.8 million in new capital works). Combined this represented a 9.7 per cent increase in the tax levy to keep the County running as it did last year.

Mayor Mertens and council rejected the proposed increase and directed staff to dial it back to zero.

“The taxpayer is getting hit from every direction,” said Mertens. “They are getting hit on their hydro bill, their HST and their water bill. The taxpayer is already carrying a heavy load.”

Mertens says he expects his senior staff to work sincerely to root out savings but knows that $2.3 million won’t be found through efficiencies alone.

“Cuts must be made,” said Mertens. “We are not going to grind out this scale of savings. The low-hanging fruit will be gone. We have to look at how we are doing business. Ultimately we will see an impact on services, and how these services are delivered.

“To cut $2 million we have to look at substantial areas— where we spend the most money. We have no choice.”

PUTTING A LID ON CAPITAL PROJECTS

Mertens says capital projects are simply off the table unless something is broken or the deferral of an essential project means increased costs next year.

“If a roof is leaking we have to fix it,” said Mertens. “Otherwise we are not going to be doing any capital projects this year. Unfortunately we don’t have that luxury this year. “But when we say this we also have to look at the impact of this decision on future years. We can’t look at this decision in isolation. That is the kind of discussion we will have.”

NOT ALONE

Mertens notes that Prince Edward County isn’t alone in wrestling with rising public service costs—particularly with public sector wages. Jurisdictions across the continent are trying to figure out how to ease the burden of these costs which reduce choices and flexibility.

It is a job that is made harder when the province awards one service—the OPP—a five per cent increase and assures its officers they will be the best paid in the province for at least the next three years. It is property taxpayers in places like Prince Edward, however, that have have to foot this bill.

Mertens has met with the mayors and wardens of many eastern Ontario municipalities in recent weeks.

“They all have the same issues,” said Mertens. “They are the same topics we have in Prince Edward County. Every community in Eastern Ontario, for example, is struggling with policing costs— because whether they are using the OPP or not they are shooting for OPP levels—each one lifting the other.”

ANOTHER WAY

While Mertens says service cuts are likely necessary this year, he says the long-term solution is to grow the County’s tax base.

“After you cut down to the bone—you have to make other types of decisions. Cutting services is a dead-end road. We must look at the other side of the ledger—we must look how to grow our revenue.”

Given that 95 per cent of the tax base is funded by home and property owners, either these folks will pay more or others will be encouraged to build homes here and share the tax load.

“The only place we are going to grow revenue is through residential development. We need to encourage folks to live here. If we don’t, our problems will deepen. In fact, we are seeing the effects of this currently.”

He says a slump in home building and additions over the past two years has reduced the expected tax base increase as well as planned revenue from development and connection charges.

Two years ago the County implemented development fees for the first time and, shortly thereafter, increased waterworks infrastructure costs sharply. Quinte West later underwent a similar review but chose not to impose the higher fees—at least not yet.

Mertens is hinting that the County may have to look at tweaking its charges in line with neighbouring municipalities or risk seeing the tax base stagnate.

“We first have to accept that we have a problem,” said Mertens. “Council needs to sit down and determine that increasing revenue should be our priority. Then we have to decide: do we compete in the industrial sector along with thousands of other jurisdictions in North America—or do we do what we are good at—attracting folks to come and live here and in doing so increase our tax base?

“We need to look at how we can we enhance our local development. That means sitting down with the building industry in the Quinte area and understanding their needs and the impediments to building in the County.”

He also says the County should look at residential development in co-ordinated way with Quinte West, Belleville and Napanee.

“There is a huge opportunity. We were getting our share because people want to live here. We should come up with a regional strategy for development—to decide among ourselves where and how development should happen in our region.”

THE HOPEFUL BITS

The budget exercise is proving to be heavy sledding for the new mayor. Aprocess, however, he says had been made easier by the sincere and hardworking efforts of senior staff and council.

“We have made huge strides over the past two and a half years,” said Mertens. “The process is far more transparent and as such it has revealed some of our weaknesses.

“We are seeing our new leadership working together—asking themselves how can we co-operate to do things more efficiently. This is an extremely positive trend.”

He says council has also taken on the budget project with energy and resolve.

“I am seeing council both new and old come together and work more cohesively through this budget exercise. The direction given to staff on the budget was clear and enjoyed the support of a strong majority of council.

“I expect that we will come out of this budget process with a better understanding of our financial position. This first year is about stabilizing our finances—but ultimately the work we do this year will form the basis of a five-year financial plan—one that puts the County on a sustainable and secure path.”