Perth County councillor raises reserves concerns during budget discussion

·7 min read

PERTH COUNTY – According to Corey Bridges, Perth County treasurer, the 2021 budget has to be a responsible and progressive balance between supporting communities and regional partners and the need to continue delivering essential municipal services during the pandemic.

“I believe the 2021 budget provides the flexibility to deal with the budget pressure expected as a result of the COVID-19 pandemic and continues the overall services of the county,” he said.

Bridges said the county is grateful for increased financial support from both the federal and provincial governments to municipalities to deal with unforeseen COVID-related costs incurred during 2020.

“The funding is definitely assisting to maintain budget changes but there are still budget pressures being faced by the county outside of the pandemic,” he said.

During the Perth County council meeting on Dec. 17, Bridges highlighted these some key areas impacting the 2021 budget.

“We continue to see reductions in the Ontario Municipal Partnership Fund (OMPF) and the effect on our 2021 budget is about 1.1 per cent as well as an increased portion of shared services,” he said. “The effect of our shared services in our 2021 budget is 1.48 per cent.”

There is a 2.47 per cent increase in the operating levy and a 1.03 per cent increase in the capital levy making the combined levy increase 3.5 per cent.

Bridges said 1.12 per cent of the increase is being affected directly by the OMPF reduction because the net internal capital budget is decreasing by .13 per cent. Overall there is a six per cent levy increase because the expected $1.02 million in OMPF funding is only 85 per cent of the amount received in 2020.

“We are still utilizing the levy stabilization reserve in our 2021 budget – $216,000 which is our surplus for 2020 to help offset this impact,” he said.

The weighted assessment of farmland impacts is affecting the percentage and the formula for shared services.

“Our weighted assessment has increased the percentage over our partners, it has increased 2.77 per cent over the last three years,” said Bridges. “This is specifically with the increase in farmland, so as noted, delays in reassessment to 2020 values impact the county itself because we’re high in farms.”

He expects once the new Municipal Property Assessment Corporation (MPAC) assessments are released, that over the next four years the shift in value will be back to residential.

There are $11.3 million in capital projects, with $7.9 million being funded from reserves, $3.4 million from the federal gas tax, provincial OCID and municipal partners and almost $3.3 million being put away to help with asset management and the future of the county’s capital.

The increase to asset management in 2021 is about $150,000 to roads and $20,000 to bridges and culverts.

“We’re looking to see those amounts increase over the next 10 years to $400,000 – to get to $4.1 million for roads and $940,000 for bridges,” said Bridges. “I’m sure we can close that infrastructure gap.”

Included in the 2021 budget is about $400,000 in cost associated with the COVID-19 safe restart.

Coun. Bob Wilhelm raised concerns about the target amount for the levy stabilization reserve.

“Going over $1 million and continuing to grow doesn’t make sense to me currently,” he said. “I just wonder if there is an established amount we’re shooting for on that reserve?”

Bridges said there is no established amount for the reserve and they would be looking at policy development to cap it.

“You just need to be aware we need to have a balanced approach in utilizing these reserves,” he said. “For example, if you wanted to reduce our levy for 2021 – $165,000 is one percentage to the levy.”

Bridges said utilizing the reserve now means that amount will be on 2022’s Bottomline.

“You’d be starting with one per cent levy in 2022 related to the utilization of reserves,” he said. “You want to balance the reserves so I think utilizing a surplus in 2021 from 2020 is alleviating some of the pressure.”

He told council members when they study the projections in the 2021 budget packages they will notice that 2022 is based on a 3.5 per cent increase for 2021.

“We’re already looking at about 5.7 per cent in 2022 so if you are utilizing $165,000… you’d be saying we’ll be at 6.7 per cent beginning 2022,” said Bridges.

Coun. Rhonda Ehgoetz said she agreed with Wilhelm.

“I have a problem that we’re taking the money from the ratepayers, squirrelling it away – I know what Corey is saying but you have to figure out a way that we can use some of that money,” she said. “So whether we use one per cent this year, one per cent next year, whatever but I don’t want that stabilization sitting at $1 million and we’re turning around and charging the taxpayers more money this coming year again.”

Ehgoetz brought the focus of discussion back to the reassessment of houses.

“We had MPAC come to our council meeting on (Dec. 12) and they do not know when it will take place that the housing industry will be reassessed,” she said. “They are waiting for the government to tell them… so I’m hoping that soon comes forward… the farmers are taking all the pressure right now so hopefully they do get that figured out.”

Bridges addressed the Wilhem and Ehgoetz concerns about the levy stabilization reserve stating that in the budget package there is planned utilization of the reserve to help mitigate impact over the next two years.

“In 2022 there is levy stabilization reserve money being utilized as well as in 2023 projected,” he said.

Coun. Daryl Herlick said this is where he always struggles with asset management.

“At the end of the day, the world runs on borrowed money,” he said. “You’ve got to have some reserves but when we keep increasing and piling up and piling up and hoarding money it allows tentacles to get in there and nail us and charge us because they know we’re doing it. These are the issues you run into. It’s frustrating.”

Bridges told Herlick there are the continuity reserve schedules for the next two years in the budget package.

“You’ll notice in our capital budget… there is a high level of capital projects which are going to be utilizing a significant amount of those reserves over the next three years,” he said.

Warden James Aitcheson encouraged everybody to go through the budget packages and then they will be able to have more informed discussions at future meetings.

He then told Ehgoetz the new MPAC assessments have already been completed and it is known the value is going to shift to residential housing.

“It’s just they haven’t been given the OK to apply the new assessments,” he said.

“Delaying a reassessment does not help with all parties,” said Bridges. “For example, farmland felt it over the last four years for the phase in – this residential side of MPAC with the data is out there. We should see the shift back over the next four years to residential, so for Perth County itself, it impacts us on the fact we are high in farmland.”

He said nobody asked the question of how the 3.5 per cent levy increase will affect ratepayers but he wanted to share the information anyways.

“A $258,000 average home would see a $17.75 increase in property taxes for 2021,” said Bridges. “A $1.453 million farm will see a $25.52 increase which is effectively a tax rate increase of 2.67 per cent.”

Several council members said those values seemed low and Bridges told them those average prices are based on 2016 data.

“I think we have to get that data corrected,” said Aitcheson. “If they were assessed at that there would be lots of affordable housing available.”

“Correct, that’s why we’re seeing that the data will probably shift in the direction of residential overall… because they get a four-year phase-in for the increases,” said Bridges.

Coun. Doug Eidt told council West Perth had its treasurer break down the statistical difference between farmland and housing.

“Residential in West Perth provided 57 per cent of the tax money, Agriculture provides 33 per cent of the overall money,” he said. “I know everybody thinks the farmers are paying way too much but remember the housing, we pay water, sewer, extra for hydro for streetlights… of course 10 per cent in West Perth comes from commercial and industrial land.”

Bridges said when staff looks at tax policy for the county the percentages are similar to those mentioned by Eidt.

Colin Burrowes, Local Journalism Initiative Reporter, Listowel Banner