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County’s CAO warns infrastructure deficit will drain capital reserves

James Hepburn

Budget talks for 2018 are under way at Shire Hall this week and while proposed numbers come in higher than last year, indications show work toward a final increase around two per cent over 2017.

Just as in many households, expenditures are increasing faster than revenues. The overall budget is a $1,272,000 increase over last year with a $34.9 million tax levy budget. Expenditures are up 3.3 per cent and revenues up 2.4 per cent.

County CAO James Hepburn presented an overview of the budget prefacing with a word of caution for council on driving capital reserves to nil as it joins municipalities across the province facing a lack of needed funding for infrastructure.

“We’ve been talking about the $31 million per year that we should be spending on capital infrastructure over the next 10 years from the recommendations in the 2014 asset management plan, said Hepburn. “Obviously we raise the money to spend it on capital, but I want council to be aware… our reserves will be fairly low going into 2019 and future years. There’s not going to be a lot of money in the bank for future projects. Having said that, a lot of the monies are based on committments we’ve made, and we will see some money free up with projects that come in under budget and the money is returned to the reserves.”

Overall, Hepburn says the operating budget is in good shape, despite the struggles with the infrasture deficit.

Water and wastewater he noted are on a track to be balanced, and by 2020 the municipality will be in a position to be more than paying its debt servicing. Rate increases July 1 and another Jan. 1 (that council approved in June) he said puts the municipality on a good footing moving forward. “The current rate model does resolve the financial sustainability.”

While the roads capital reserves budget includes an additional $150,000 (now at $3,150,000 cumulative over years) “it certainly doesn’t address the 2014 asset managment plan recommended, but I think it’s important to start to get some momentum to putting more money into the roads capital reserve.”

Between immediate needs of $17 million per year and life cycle needs of $14 million per year (making up the 31 million per year) Hepburn noted that while some of that is contained in the operating budgets “it’s still a big number – especially when you consider we’re raising approximately $35 million in taxes, that $31 million is a pretty scary number.”

Funds at the municipality’s disposal in 2018 for roads and bridges capital tally about $5 million against a capital budget of $9.1 million which causes a a deficit position. Currently there’s more than $8 million in committed projects – including County Roads 1 and 14, Wilson Road and Talbot Street in Picton.

The good news, he said, is that “although we are going into a negative short-term basis on projects in the plan, we will have eliminated this deficit by 2021 – albeit you’ll see the number of projects in future years are fairly light. We have a couple or three years of aggressive project plans and then we are going to have to back off if we don’t find other sources for roads and bridges capital.”

 

Filed Under: Local News

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  1. Susan says:

    Well Chris, perhaps you could ask the old Tory friends who did the downloading and will again if given the chance.

  2. Chris Keen says:

    Perhaps the mayor can ask his new friends at Queen’s Park for help for rural Ontario to fund all the infrastructure we can’t afford to support downloaded on us years ago? Oh…wait we’ve already been turned down!

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