Norfolk’s budget surplus good news for residents — just not today

Norfolk County made money last year — but residents should not expect a break on their property taxes any time soon.

Auditors reported a $14.5-million operating surplus in 2023, which is welcome news for a municipality that for years ran deficits and shortchanged reserve payments to keep tax increases low.

“The surplus was significantly higher than anticipated,” treasurer Amy Fanning told councillors on Tuesday.

That is in part because Norfolk’s investments outperformed expectations last year, bringing in $12.7 million, or almost double the return from 2022.

And an influx of people and businesses to the county raised $10 million more in taxes than 2022.

Continuing an approach established under the previous council led by Mayor Kristal Chopp, the current council has focused on replenishing reserves and socking money away for needed infrastructure upgrades.

That is how this year’s surplus will be spent, with an aim toward putting the county on a more stable financial footing, Fanning said.

During Tuesday’s meeting, councillors heard a consultant’s report warning Norfolk will need to spend $136 million every year for the next decade to maintain and upgrade deteriorating roads, bridges, county-owned buildings and other infrastructure, including the water system.

That is $29 million more annually than council committed to when approving a billion-dollar 10-year capital plan last October.

Based on Norfolk’s current pace of contributing to capital reserves, the county is short $88 million per year on essential infrastructure spending, council heard.

“Those numbers are daunting, to say the least,” Fanning said.

“Our main objective over the coming year will be to design a sustainable long-term funding strategy.”

Residential property taxes rose 6.3 per cent in 2024 while water rates went up 12 per cent.

Staff have projected another property tax hike of 8.5 per cent next year.

Higher taxes, while “painful” for residents, are “necessary” to close the infrastructure funding gap and ensure Norfolk can hold the line on services without drowning in debt, said Matt McInally of Millards Chartered Professional Accountants, who presented the audited financial statements.

“Continue the course,” McInally advised. “There is some heavy lifting to be done … but I think you guys are on the right track.”

J.P. Antonacci, Local Journalism Initiative Reporter, The Hamilton Spectator