BRUCE COUNTY – Edward Henley, director of corporate services, presented the 2023-27 budget preliminary report to council at the Jan. 12 meeting.
CAO Derrick Thomson said the preliminary report “sets the stage” for budget discussions.
The goal of the budget is to “strengthen the foundation of our core services” and to foster “fiscal sustainability” through building reserves.
“The county has very large assets,” he said noting that “the bridges we’re replacing are $10 million a shot… that takes planning.”
While the county has improved its financial position in the past year, Henley explained that it will take time to build financial reserves to the point where Bruce County’s financial position is comparable to its peers.
Henley used the Oswald Bridge failure in Chesley to illustrate the need for financial reserves. In 2018, the bridge that was over 100 years old, failed. There was no money in reserves to replace it. Thus, the $3 million replacement cost became $3.9 million when the cost of borrowing the money was added. In 2022, an annual levy increase of 1.5 per cent was established for the replacement of the Teeswater River Bridge in Paisley and the Durham Street Bridge in Walkerton.
The pre-budget report stressed that tax increases at or below the Consumer Price Index inflation are “actually cuts.” Increases in reserve balances have not kept pace with increases in expenditures over the years, with reserves used as a way to reduce levy increases.
The draft budget will be presented Jan. 19, with discussion in February, with March 2 as the possible date for adoption of the 2023 budget and the county levy.
Bruce County uses a five-year budget package. Only the 2023 budget will be approved, with the 2024-2027 budgets remaining a forecast. The purpose of the five-year forecast is to “flatten” long-term levy increases.
Budget pressures for 2023 include an inflation rate of about seven per cent, an increase in construction costs of 14 per cent, and an effort to eliminate the infrastructure deficit over 15 years.
The budget that will be presented this week (Jan. 19) to Bruce County council may call for some difficult decisions to be made by council.
Warden Chris Peabody referred to the numbers in the budget package for Thursday’s corporate services committee meeting “shocking.”
Among the items highlighted in the proposed budget is creation of a deputy CAO position to provide “senior level advice, expertise and support to the CAO in the efficient delivery of municipal services, freeing the CAO to deliver critical corporate strategic initiatives.” This comes at a cost - $230,078 including salary and benefits.
Another position is that of real estate clerk, to support “capital/infrastructure activities.” The position would save costs and reduce unnecessary delays.
Highlights include a chart showing a sharp spike in long-term care agency costs – over $4 million in 2022.
The draft consolidated budget – capital and operating – will see an operating levy increase of 9.41 per cent and a capital levy increase of 3.32 per cent for a total of 12.73 per cent. This would be offset in part by growth for a proposed levy increase of 10.57 per cent.
The forecast 2024 budget has a levy increase of 17.29 per cent.
Pauline Kerr, Local Journalism Initiative Reporter, The Walkerton Herald Times