Pembroke – It was a challenging year for Renfrew County councillors and staff dealing with the 2023 budget amidst rising costs, increased needs and the reality of economic pressures on taxpayers in the county.

“Our staff were in an untenable situation in preparing the budget,” Bonnechere Valley Mayor Jennifer Murphy, who chairs the Finance Committee, noted. “And council gave very thoughtful consideration to the budget.”

In the end, it was a two-day budget workshop last Wednesday and Thursday as councillors looked at various options and pressures before approving the document, which will be passed at a future meeting of council. The levy is going up from $50,540,380 in 2022 to $52,893,896 in 2023, which includes not only the set levy increase of 2.5 percent but growth in the county of 2.16 percent.

It was a complicated budget since the actual pressures on the county would have called for a much bigger increase of around 10 percent so staff worked hard to bring the budget into a more reasonable increase for taxpayers.

In the end, the increase for taxpayers fell within parameters which have been set in past years. The county has been operating on an annual levy increase of 2.5 percent and although different factors, including a higher rate of growth and the change in the Industrial Ratio meant the levy was higher than the 2.5 percent, the dollar increase year over year does not vary much from where it was in previous years.

In 2023, homeowners will pay an additional $9.88 per $100,000 assessment. If a home is valued at the median property value in the county of $203,000, this means an increase of $20.06 on the county portion of property taxes. Homeowners paid $774.69 to the county for that $203,000 home in 2022 and will pay $794.75 in 2023. The property tax bill homeowners receive also includes the education tax portion and municipal tax portion. Mayor Murphy explained the formula varies a bit, but in essence about 30 percent goes toward education and the remainder is split between the municipality and the county.

“We were presented a budget with the 2.5 percent increase,” she said. “With some enhancements and what they had to cut I don’t know how staff managed to get the budget to us.”

One major financial pressure is funding the paramedic service adequately, she noted.

“We did not cut the 12-hour overnight in Eganville but will also add another 24-hour ambulance in 2023,” she said.

The paramedic budget went up by about $1 million due to this, but the pressure on the paramedic service makes this necessary, she said.

“In public works, we are changing how we do business in engineering, bring it in-house,” she said.

She said this will result in cost savings for the county.

“Staff did an incredible job with a difficult budget,” she said.

The county was able to swing this budget by bringing surpluses from 2022 into the needs for 2023, for example the new ambulance, she said.

“We are taking money from what would go to reserves.”

The mayor admitted this is not consistent with past funding strategies.

“If it was any other year, I would say ‘no’,” she said. “But there are budget pressures people have in their own homes. We are hearing horror stores with food and heating.”

Inflation is making it hard for county residents and this is not the time for a big tax increase, she believes.

The increase of just under $10 per $100,000 in assessment is very consistent with previous years, she noted. Last year the increase was around $6.50 per $100,000 in assessment and in 2021, it was up to $9.07. The two-day workshop was the longest in recent memory.

“Two days is a tough slog,” the mayor said. “We needed overnight to think where we were going. We did what we needed for our residents in 2023.”

County Budget and Long-Term Planning

In the presentation to the county by Treasurer Jeff Foss, it was noted while the target was 2.5 percent for the levy, the status quo service level budget for 2023 was much higher at 10.7 percent.

“To reach our target of a 2.5 percent increase over 2022, we need to reduce the levy by $3,062,296,” he said in his presentation.

As a result, staff reviewed service level reductions that were required by each department to reach the 2.5 percent goal, he noted. Staff did not include any COVID-19 expense in the 2023 budget that would impact the municipal levy.

Mr. Foss also addressed the county long-term financial plan. While the 10-year capital plan was slated to be $401,144,120, this was adjusted this year for inflation, CAO/Committee adjustments and new equipment items, increasing it to $441,354,931. This requires $363 million in reserve funding, $17 million from the province through OCIF, $29 million from the gas tax and $31 million in new dept, plus $751,000 from the City of Pembroke for the Renfrew County Housing Corporation. Mr. Foss said if there is continued growth in the county and the levy target is increased to three percent (where it had been set initially), the plan will generate $256 million into reserves, but still fall short by about $100,000.

Looking at the long-term financial plan capital reserve balance, he said the reserves will reduce from $49 million at the end of 2021 to $35 million at the end of 2023.

“Our reserves will be depleted by 2026,” he warned. “The long-term plan will generate $256 million over the next 10 years, which is not sufficient to fund the $363 million needed for capital renewal.”

In presenting the long-term report card, he said the county is coming up short by not setting the levy to an annual three precent increase. As well, although the county had anticipated inflation to be at two percent, the actual number is six percent. Interest, which was estimated to be three percent, is also much higher at five percent. All this means the funding gap has increased dramatically and the minimum reserve balance will not be met.

Options he presented were to: increase the annual levy; reduce service levels for roads, bridges and culverts; finance the current Capital Plan with more debt or use a combination of the different strategies.

Debbi Christinck, Local Journalism Initiative Reporter, The Eganville Leader