BRUCE COUNTY – Bruce County council has decided to bite the bullet, however unpalatable it might be, and implement an infrastructure renewal levy of 1.5 per cent for 2022, in addition to the 4.8 per cent regular levy.
The county, like many others over the past number of years, has been balancing the budget by postponing work on bridges and roads – not a sustainable policy.
“What it did not do was ensure the county would raise enough money to replace infrastructure,” said Edward Henley, director of corporate services.
Faced with $13 million in bridge work in the next few years – the bridges in Paisley and Walkerton – council asked Henley to bring back some numbers and options for avoiding substantial interest charges on borrowing, money that could be used to do additional infrastructure work. Council was not willing to vote on the 2022 budget as presented.
At the Oct. 28 corporate services committee meeting, Henley presented a report that explored the impact of implementing an infrastructure renewal capital levy in 2022 and annually for the following four years. The levy would be “reinvesting in our county,” Henley said.
He noted the cost of borrowing the $13 million for replacement of the Teeswater Bridge in Paisley, 2021-2024, and the Durham Street Bridge in Walkerton, 2024-2026, would result in interest charges of over $5.3 million.
He outlined four options to help alleviate or even eliminate the cost of borrowing.
Option one was a one per cent levy increase for 2022 and an additional one per cent per year increase for 2023-2026. This would generate close to $9 million in funds, or 66.75 per cent of the $13 million amount.
Options two and three – respectively 1.5 per cent and two per cent for 2022 and one per cent annually after that – would cover a larger portion of the $13 million.
It was option four that staff recommended – 1.5 per cent per year beginning in 2022 and increasing by 1.5 per cent annually until 2026. That would cover just over the $13 million.
“The strategy would save $5.3 million in interest and is a better use of tax dollars,” said Henley.
He noted that several factors would help the levy do its job. Work has already started on rebuilding the county’s working fund. The county also has “a healthy overdraft limit at the bank” to ensure sufficient cash flow. In addition, long-term investments are coming due in 2023 and 2024.
He suggested this strategy addresses bridges. Looking down the road, he suggested earmarking any money from the Canada Community-Building Fund (formerly known as the Gas Tax Fund) for roads infrastructure.
County Coun. Milt McIver, Northern Bruce Peninsula, asked about development charges and was told the two bridges wouldn’t qualify, since they don’t involve additional lanes or widening. However, some road work planned for future years does involve widening and would qualify for development charges.
He said that while the answer “wasn’t what I was looking for,” he’d be willing to look at a one per cent levy this year.
County Coun. Luke Charbonneau said, “This starts to get us in the direction we need to head.”
He took it a step further by asking how long it would take to eliminate the county’s infrastructure deficit discussed by Miguel Pelletier, director of transportation and environmental services, at a previous meeting. Charbonneau mentioned a figure used by Pelletier, that it would take $8 million a year to deal with infrastructure.
Henley said the infrastructure deficit could be eliminated “by 2029, and if additional upper-level funding… reduced by a year or so.”
Charbonneau commented, “So, eight years to close the gap … this can only go on for so long before we have to start reducing services.”
He went on to say, “I think we could do more. We’re falling behind every year.”
He suggested continuing to use the county’s substantial borrowing capacity, along with the levy.
While council seemed to be in agreement about an infrastructure renewal levy of one per cent this year and annually until 2026 (option one), County Coun. Mitch Twolan, Huron-Kinloss had a different idea.
“I think we should go with the recommendation (option four),” he said. “We’re just putting off the inevitable (with option one),” he said, explaining that dealing with OPP costs, lost OMPF (Ontario Municipal Partnership Fund) money that had to be recaptured, taking on long-term care – in essence, two hospitals, and social housing, council “has done a lot of really good things.” Previous councils made good decisions for their day, too, but everyone knew the cost would be infrastructure, said Twolan.
“We have to take the hit now,” he said.
He noted MPAC (Municipal Property Assessment Corporation) has made budgeting difficult, “not knowing what the actual dollars are.”
County Coun. Steve Hammell said he’d second Twolan’s motion.
County Coun. Gerry Glover, Kincardine, said he agreed with the other two, that it was time to bite the bullet and go with the staff recommendation.
County Coun. Robert Buckle, South Bruce, agreed with an earlier analogy used by Glover about “kicking the can further down the road. We have to stop doing that.”
While Warden Janice Jackson, South Bruce Peninsula, said she doesn’t like levy increases in the amount the county is looking at – 4.8 per cent plus the 1.5 per cent – “I recognize the (infrastructure) shortfall.” She said next year she’d like to see the other departments take a hard look at their own budgets.
The motion for approving in principle a 1.5 per cent infrastructure renewal levy carried unanimously.
Pauline Kerr, Local Journalism Initiative Reporter, The Walkerton Herald Times