Comment
Not their money
It’s a special time of year. It’s the season when we curl up before the fire with a pencil, a calculator and the County’s draft budget. Like other December celebrations, the County budget can inspire both joy and sorrow—depending on circumstances. For the wealthy, it is but a minor imposition and the opportunity to express fealty to the collective good. For others, it amounts to the steady and unrelenting pull on their ability to stay afloat in this increasingly unaffordable community.
The first draft of the County’s operating budget points to a 3.2 per cent hike to the tax levy—that is the amount to be paid by property owners in Prince Edward County. From a tax levy of $40.3 million in 2020, the freshout- of-the-box draft budget seeks an increase to $41.6 million.
Some context, in 1998 the tax levy was just $10.3 million. This means the property taxpayer’s responsibility for keeping the municipality solvent has quadrupled in just over two decades. Far faster than inflation. Faster than the cost of living. From an average of $412 paid by every man, woman and child in 1998 to $1,681 per person next year. This scale of increase changes communities. It changes families.
In terms of this year’s budget, council is just getting started. It opened the package just this week. After a year of plague, some of our elected folk may sense an opportunity to expand the scope and ambition of local government. Meanwhile, the province, mindful of its own pandemic budget pressures, is likely to continue to offload more costs onto its municipal creatures.
All this suggests that a 3.2 per cent increase to the tax levy is likely just the starting point. Brace yourself for municipal government—and the services it provides— to be much more expensive next year.
In any event, 2020 is unlikely to be a particularly useful benchmark year. It will, for generations to come, require an asterisk. And the County’s operating budget projections for the coming year may not be a useful indicator of long- or mid-term trends. Not that we should fail to scrutinize it carefully, but rather that it might inform a peculiar and forgettable year.
This budget season, my lens is focused intensely upon waterworks spending. Specifically, $19 million earmarked for Wellington. Let’s start by acknowledging that this is a lot of money. Typically, the municipality spends about $5 to $6 million on waterworks capital expenditures—either replacing or significant repairs to pipes, plants and pumps.
We know the bulk of the planned 2021 waterworks project spending aims to expand the system to enable residential development in the village. Much, if not all, of these capital expenditures will be offloaded to the developers and ultimately to the new homeowners. It is general practice that the cost of growth is wholly charged to those new homeowners who will receive the benefit of this expansion. Existing waterworks consumers should not bear any of this additional burden. That is the principle.
It gets murky in a hurry, however, once we wade into this bog. Measuring the benefit that gets accorded to existing or future consumers quickly becomes a more complex and tangled task. Rather than binary, these judgements become more subjective and arbitrary.
Which brings us to governance. The scale of proposed spending swamps any other capital expenditure on this system. When the Wellington water system was built in 1963, the entire project cost $297,221, including water tower, pipes and plant—about $2.5 million in today’s dollars. So, $19 million is a big, big number.
But in 1963, it was the village elders and residents who called the shots. Everyone involved in the decision-making had a direct interest in the waterworks utility it was forming. It had a direct interest not only that it work well, but that it be cost-effective.
We have no such arrangement in 2020. Most of the council members who are slated to make the decisions governing Wellington’s massive expansion have no stake in the waterworks system at all. They don’t live in this community. Nor will most bear the financial risk of their decisions. This is a terrible premise.
There is a minefield of decisions that must be navigated in the coming year about Wellington’s waterworks system and the implications for population, density and planning—extending to Picton’s water supply and perhaps beyond. Many of these decisions will involve significant competing and conflicting interests.
If not strictly legally compromising, there is a wide range of ethical and fiduciary reasons to ensure the interests of those who govern the waterworks system align with the consumers who fund it entirely. The users are the de facto owners of the utility.
This column’s call for a waterworks commission governed exclusively by users of the service has gone unheeded for several years. While this remains the preferred remedy, it may be beyond the ability of Shire Hall to muster this body without incurring significant delays to the planned expansion.
Therefore, Shire Hall must move to establish a waterworks committee comprised exclusively of council members who are customers of this utility. They alone will make the final decision about what is spent and how it is financed.
Council has neglected this waterworks utility for two decades. It has made a long series of terrible decisions and allowed obscenely expensive arrangements to fester unchecked year after year. Why? It is not their money. They don’t bear the implications of their decisions. They have no stake in the success of the utility.
Meanwhile, costs spiral upward. Living here gets more expensive. Bit by bit the County becomes a place where only the wealthy can manage.
In this budget season, let us begin to put the municipal waterworks utility on the path toward proper and self-assured governance.
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