Too much

There are more expensive places to live in Ontario—but not many. The average tax burden for a household in Prince Edward County was $5,405 in 2020, according to BMA Management Consulting in its annual comparative review of Ontario municipalities. (The tax burden is measured by adding the average property tax bill to the average waterworks bill, assuming 200m3 of water used).

Ottawa households pay less. So do Toronto homeowners. Only Kingston saddles its residents with a greater tax burden among the nine municipalities surveyed in eastern Ontario. The average load imposed by these municipalities is $4,602 per household—$ 800 less than Prince Edward County. It is another hurdle we have erected that is making this place increasingly unaffordable to many County families. None of it has dimmed ambitions at Shire Hall.

It is budget season. Next week, Council will review and then authorize about $10 million in non-waterworks capital spending for next year—most of it on roads. Shire Hall has few reserves to draw upon, so most of this funding will come from its operating budget—which Council won’t consider until February. This enables the municipality to get its projects into the market early, which may or may not produce a better price. While this arrangement makes sense operationally, it requires preapproval of a big chunk of 2022 spending before Council— and you and I—know the complete budget picture.

This is a big ask.

Council is also being asked further to approve more than $50 million in waterworks capital spending—most of this in Wellington. A full $47.5 million will be funded by way of up-front financing agreements from residential developers. The public—and in particular waterworks customers—have never seen the details of these agreements. Terms, conditions, timing—nothing. It is not clear Council members have seen them either. We don’t know what is included and what isn’t in this grand bargain.

Once it starts down this $100 million path, it is hard to see how Shire Hall changes course, should circumstances change. Or expectations fall short. Or the market craps out. We know that whatever developers don’t fund, waterworks customers will be on the hook.

This is a very big ask.

Shire Hall is finishing 2021 with a $2 million surplus. It sounds like a good thing. And maybe it is. But it needs to be explained. Where did it come from? Were projects dropped? Postponed? Did Shire Hall generate more revenue than expected? It is a big number relative to a $41 million tax levy. Five per cent of the amount collected from taxpayers last year wasn’t spent.

So, will Shire Hall give it back?

Of course not. It proposes to transfer $500,000 to bulk up its winter control budget. Fully $1.5 million will go into a rate stabilization fund to “smooth out tax levy impact of 2022 budget”. Once again, we won’t see this budget until February.

In plain language, Shire Hall will use your money to make it look like the big increases coming in February don’t feel so bad.

It is called marketing. It has no place in the discussion of public funds. It is disrespectful of the folks who fund the enterprise.

Furthermore, surpluses can also be habit forming. If you are a municipal bureaucrat, it is better to ask for too much than it is to come up short and come back for more money. When surplus funds slosh into a discretionary fund the financial picture gets murkier. When surpluses become a habit, the picture becomes opaque.

Did they really need $41 million? If not, better to leave it in the hands of folks struggling in one of the most expensive jurisdictions in the province.

Finally, County Road 49 is back. Maybe. Under a scenario described as “additional opportunities for debt-financed capital,” Shire Hall suggests that it could reconstruct this concrete highway from the Skyway Bridge to Fish Lake Road—about 4.4 kilometres— for $8 million. This, Shire Hall suggests, will add $455,100 in annual debt payments. For three decades. Spending $30 million to rebuild the entire road—the current estimate—will incur an increase to Shire Hall’s annual debt payments of $1.7 million for the next 30 years. For a single road.

It is too much. Way, way too much—given that we spend $8 million on all roads per year. Is it really the eventual plan to spend 21 per cent of our total roads budget paying down debt on one road?

This newspaper has been calling for a reckoning on County roads for more than a decade. There has never been a comprehensive road plan put together and presented to residents. Each year it gets pushed off. Wait until budget, we are told.

Well, we are here. There are a great many questions that need answers. Neither new debt for roads, nor green lights for waterworks megaprojects can be approved by Council until these answers are produced, explained and properly justified.

County CAO Marcia Wallace says Shire Hall wants to work toward a budget process that is more transparent and accountable. It starts here.

rick@wellingtontimes.ca