Comment
One way or another
THE GOOD NEWS
The budget Shire Hall presented this week does not propose an increase to the tax levy. This is a remarkable first in the history of this amalgamated County. Things, of course, may change in the next few days—council only put their hands on the draft this week, and some may seize this opportunity to fund their favourite priority — but it must be said at the outset, that municipal staff accomplished something that has never been done before—a zero per cent increase in the tax levy.
Why is this important? In 1998, the tax levy, which is the amount collected through property taxes, was $10.3 million. Last year it was $38.5 million. Nearly a four-fold increase in two decades. Meanwhile, over these 20 years, the County’s population has fallen a wee bit. Four times the tax rate on fewer people. Put another way, inflation has increased on average 1.87 per cent annually over this period. The tax levy in this County, however, has ramped up by an average of more than 6 per cent per year every year— three times the rate of inflation. This means that every year the amalgamated County has existed, it has reached ever deeper and deeper into a fewer number of pockets. Until this one.
It is indeed a remarkable thing that Shire Hall folks managed to maintain services, keep the lights on it 88 buildings and absorb the estimated costs of the province’s shrinking funding in land ambulance service, conservation authorities, social services and such, without an increase to the tax levy.
One important caveat: municipal expenditures are still expected to rise by $1.2 million this year compared to last—but staff is counting on pulling in $1.8 million more in revenue through more grant funding, user and permit fees as well as increased transfers from reserves. A wee bit of three-card monte, but let’s stay positive.
For some folks, a zero per cent increase to the tax levy, will mean a small reduction in their property tax bill—as new assessment will offset some of the tax burden on existing homeowners. I repeat, this all assumes council leaves this accomplishment intact, and the anticipated revenue Shire Hall anticipates is delivered.
THE SOBERING
Things are going to change. The business of County government is going to come under close scrutiny in 2020. This municipality has undergone service reviews before, but the public and employee backlash that ensued after such attempts unraveled many if not all the efficiencies that were extracted. That seems unlikely this time. Having burned through three County managers in five years, I expect Marcia Wallace will be given considerable latitude as the County’s new Chief Administrative Officer.
In her executive summary to the 2020 budget, Wallace outlined both her short-term needs and thumbnailed her longer-term ambitions. She is seeking $91,000—to be taken from provincial modernization funds—to implement an online booking system for the County’s arenas, halls and such, as well as an online public consultation tool aimed at improving the dialogue between residents and Shire Hall. Both items seem obviously worthwhile and will likely face little resistance.
The next bits will be harder. Wallace describes the need for broader modernization of services including upgrading the County payroll system, automating bill payments and establishing a public WiFi system. Each of these projects will need to point to a clear payback before being greenlighted.
Wallace wants a consultant to assess the business and select six areas where the greatest efficiencies might be achieved and then drill down to determine: Should it continue to be done? And, if so, can it be done better and more efficiently?
Wallace also wants to take a closer look at sorting the governance bits from the administrative responsibilities. While successive councils have improved in this regard, there remains the latent desire on the part of some elected folks to manage the staff and assets.
Asset management planning, meanwhile, is also a key target of the new CAO. It’s only been a decade since the municipality even began counting its things—trucks, buildings, plants and such. Lacking meaningful reserves to replace these assets, and despite $86,000 spent preparing data for this plan, Wallace found “there continues to be challenges in implementing asset management planning in the County.”
THE BAD
Waterworks consumers are going to be pummelled again in 2020. Water and wastewater operations budgets are set to jump by 5.6 per cent and 3.6 per cent respectively. More worryingly, the County is planning on spending $36.8 million on capital works this year—including a new water tower, and backbone pipes along the Millennium Trail in Wellington to serve new development. Waterworks only has $1.9 million in reserves and expects about $700,000 in development charges this year. That means a mountain of new debt for the waterworks utility.
In concept, new homebuilding should, and will, pay for these massive capital projects plus accumulated interest through development charges. But at the current rate of homebuilding in the County, that might take 50 years or more. In the meantime, it is the existing users of the utility who will bear this debt burden.
To be clear, we don’t have another good option but to go forward—declining population has serious and compounding challenges far greater than taking on more debt. Yet this mounting leverage on the back of waterworks’ consumers only argues more loudly that this business be governed by those who use it rather than council—most of whom have no direct stake in the financial viability of the utility.
It is also one more reminder that we need to see traction in new homebuilding in 2020. While many developers are expressing interest, all but a couple of legacy builders remain stuck on the sidelines. If we proceed to build tens of millions of dollars of infrastructure in anticipation of new homes and these investors ultimately decide that Quinte West and Belleville are better bets, we will all be in deep trouble.
Comments (0)