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Infrastructure remains County’s biggest budget challenge

County CAO James Hepburn delivers the 2019 budget overview to council members.

Prince Edward County’s Chief Administrative Officer told council the biggest challenge moving forward on the 2019 budget will be addressing infrastructure in a meaningful way.

“It does continue to be our greatest fiscal challenge,” said James Hepburn during his presentation of the budget overview Monday morning.

The week has been set aside at Shire Hall for budget information and discussion. Along with the 2019 operating budget of $54.5 million and a capital budget of $14.3 million, council must also consider water and wastewater operating budgets of $3.8 million and $4.1 million as well as the water and wastewater capital budget of $7.8 million.

“We are going to take our time with this process, especially with so many new council members participating in their first municipal budget,” said Mayor Steve Ferguson. “At the end of the process, we want to make sure we are confident with our decisions.”

The budget maintains current service levels and includes additional costs for winter control and commitment to affordable housing and other community initiatives, Hepburn said, noting all initiatives the previous council committed make up a significant amount in the budget “and will bear scrutiny as we move through it.

“We have the funding for the new hospital to meet the $4.5 million funding commitment over 15 years. Probably the biggest challenge moving forward is that we haven’t addressed our infrastructure budget in a meaningful way.”

The problem, he said, remains bigger than the monies being raised through taxation.

Asset management planning through engaging Watson and Associates in 2018 will assist as the current plan only addresses transportation and water/wastewater infrastructure. Going forward, the new plan will address all the County’s tangible capital assets and meet new acts and guidelines required by the province. Council and the public will have input in the coming months.

Staff will be loading all asset inventory information into the municipality’s new software then delineate the state of local infrastructures, assess, define and establish levels of service and create a life-cycle management strategy, followed by a financial strategy.

Giving councillors an idea of the magnitude of assets, Hepburn explained the last plan in 2013 showed just shy of $670 million needed. These six years later, the municipality, he said, would likely need mid $700 million in terms of replacement cost.

Sharing a partial list of buildings and properties still to be looked at, he said, includes two community centres; 10 accessory buildings at Picton fairgrounds, 11 town halls, five public works garages, 10 fire stations one long-term care home, five museums with 30 accessory buildings, six library branches, four landfill and three transfer sites – just from building perspective and not including playground installations, bleachers, fencing and more on a list that reflects close to 6,500 individual assets.

“We have made progress on the water waste/water side of things,” he said, reminding the ad hoc committee provided rate recommendations in June 2017 that required regular rate increases. We are meeting the plan objectives.”

Hepburn captured how money flows in the budget process so new councillors would recognize the operating budget is the key conduit for all budgets and reserve budgets.

“That is your primary source to fund capital projects,” he said, noting there are provincial and federal grants, “but the real place we can influence money for capital projects is transfers to reserves, through our capital budget.”

During Monday’s deliberations, funding was discussed for several organizations.

The County’s commitment of $4.5 million to the Prince Edward County Memorial Hospital Foundation for the construction of the new Prince Edward County Memorial Hospital will be funded over a period of 15 years. The unfunded balance of the funding commitment will be borrowed at the time when the municipality is required by the government to contribute its portion in full – anticipated for 2023, but possibly earlier.

There is to be $312,000 included in the 2019 budget as the initial annual budget allocation to fund the County’s commitment and be transferred to the Hospital Construction Reserve. Future budgets are to include an annual budget allocation and $128,000 will be advanced from the Hospital Construction Reserve to the foundation to be used for costs associated with the capital campaign.

Shannon Coull, executive director of the Prince Edward County Memorial Hospital Foundation, told the new council the foundation is grateful.

“Your support and initial installment toward the $4.5 million pledge is greatly appreciated,” she said, noting there is a government requirement for the foundation to secure $5.7 million in cash by Spring 2020.

She noted that at the end of January, the Quinte Health Care board is to meet in the County to review the new hospital’s Stage 2 submission. Once approved, it will be submitted to the ministry for review, response with questions and recommendations.

“If all goes well, then we will move into stage 3 (of 5)”, she said.

Councillors Jamie Forrester and Phil Prinzen requested a reflection of one per cent funding be shown on the tax bills that it is going to the hospital fund.

The Prince Edward Fitness and Aquatic Centre operating grant of up to $50,000 from 2019 – 2022 and an annual capital grant of $20,000 over the same period. Having exceeded its current business plan growth targets, PEFAC reduced its operations request from $70,000.

The County Foundation annual operational grant of $40,000 from 2019-2022. Since 2016, the foundation administers the County’s Community Grants Program requests under $5,000. Its grants review committee will be adjudicating grants over $5,000 to create a more efficient process for final decision making by council. In the last agreement, the foundation received $30,000 annually to fund positions that assist with growing its funds while administering and growing the County’s Community Grant program.

The grant program for Young and New Farmers was raised to $40,000 to continue assisting young and new farmers negatively impacted by MPAC increases in the assessed value of farmland. The program was approved by council in 2018. Grants totalling $11,399.85, were distributed to 17 of 20 applicants.

Following a short lunch break, Amanda Carter, Director of Finance, provided lengthy overviews of the draft operating budget by department and addressed questions from council.

Her review continues at Tuesday’s session, beginning at 9:30 a.m. in Shire Hall including an overview of continuing capital projects, budget and the 2020-2023 capital forecast including land, buildings, vehicles, equipment, bridges, studies.

Barb Sweet, CEO of the Picton Library is also scheduled to provide an update on the proposed capital expansion project.

The meetings are open to the public and are being live streamed on the County’s website.

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  1. Bruce Dowdell says:

    You are right Gary, Mt Tabor should not be considered as an alternative to the Town Hall. When Bredin Hall was built in 1997 it was designed as an alternative and the Cubs and Scouts used to meet there. The Marysburgh Mummers were the only theatre group and they would put on a maximum of two shows a year. However, the performing arts scene has grown in the last 20 years.
    In our Management agreement, The County is only responsible for heat, hydro, telephone, insurance, safety concerns such as testing the water and fire alarms. Building maintenance of a Capital nature would be planned jointly between The County and the Management Committee.

  2. Gary Mooney says:

    Thanks, Bruce, for the information that you have provided. S.M. Councillor John Hirsch also corrected me by email on the extent of use of Milford Town Hall, but without numbers. It’s rare for me to make statements without proper research; this was one time, and I apologize.

    Given how much Mount Tabor is tied up with productions / live performances, it needs to be evaluated as a theatre and not as an alternative for a town hall in S.M.

    The fact that these two buildings are managed by a volunteer group is a mitigating factor when considering affordability. But there is still the cost of heating, cleaning, repairs, etc.

  3. Bruce Dowdell says:

    I have to take exception to Gary Mooney’s suggestion that the South Marysburgh Town Hall should be sold because it is under utilized and that Mt Tabor is more versatile.
    In 2018 the South Marysburgh Town Hall was rented 128 days with 17 of those days having multiple rentals. Mt. Tabor was rented for 32 weeks for productions plus another 11 days for individual performances. When a production is in Mt Tabor it is not available for individual meetings.
    Both these buildings are under the South Marysburgh Management Committee, a sub committee of the South Marysburgh Recreation Board and appointed by Council.
    This is a volunteer committee that looks after the renting, interior maintenance and repairs of the buildings
    and has saved The County thousands of dollars over the last four years.
    Town Halls are an important part of each community and should be looked after by a volunteer committee in co-operation with The County

  4. Paul Cole says:

    I agree with Chris Keen inspection costs should be covered by the STA owner and may possibly be included in the licensing fee once council has made those decisions…

  5. Chris Keen says:

    If Mark heard correctly that two individuals are to be hired to deal with STAs these operations will need to earn $6.5 million in revenue this year to cover taxpayer costs. In this scenario, the County’s 4% Accommodation Tax would amount to $260,000. Half of this must be spent on marketing the County, the remainder, $130,000, would cover staff costs.

    Using figures provided to the County by Airbnb last year, $7800 per year annual earnings of a “typical” host for their 580 “active” listings brings in revenue of $4.5 million, netting the County $181,000 in A.T. revenue or $90,000 to cover staffing – a $2 million shortfall.

    So much for the Accomodation tax being a benefit to the County allowing us to fix infrastructure etc… County taxpayers should NOT be underwriting Airbnb! One solution? Charge Airbnb’s “hosts” for the cost of the inspections – $225 per host per year will cover the cost of the inspectors.

  6. Mark says:

    A few observations. Last Council at the last minute dove into governing short term accomodations. If I heard it right (correct me if wrong) the budget is approving 2 new hires of a Fire Prevention Officer and a Bylaw Officer to deal with STA’s. I previously last fall warned of this scenerio. Those costs on the top end with benefits will be 130 – 150 K. How do we expect governing short term açommodations to be revenue neutral, when we are hiring staff on taxpayers backs prior to even legislating licensing requirements. And wait for tomorrow when I fully expect a Councilor comes attempting to sell Picton’s Town Hall.

  7. Craig says:

    So sell off some town halls for a few million dollars to help cover budget shortfalls today? Where does this leave of decades from now? Sell off Shire Hall and Crystal Palace then? Why not try to live within our means?

  8. Gary Mooney says:

    In order to retain a historic connection to the past, and a meeting place to maintain a sense of community, each of the (now) nine Wards deserves to have its own town town hall.

    The budget presentation mentions 11 town halls, but there are only nine wards. Presumably, the other two are the Crystal Palace in Picton and Mount Tabor in Millford.

    Both Picton and Wellington have community centres, which can substitute for town halls. The same holds true for Mount Tabor.

    If the County is serious about reducing the costs of infrastructure, here are some suggestions:

    1. Sell off Wellington Town Hall, which is minimally utilized. The Community Centre is more versatile as a town hall.

    2. Sell off South Marysburgh Town Hall, also minimally utilized. Mount Tabor is more versatile than the town hall.

    3. Keep Picton Town Hall, being the most central meeting place for all County residents. Also, its location allows tie-ins with other activities in Picton’s commercial area.

    Any suggestion of selling off town halls will generate opposition. But we’re in a deep hole as regards infrastructure maintenance and operations costs. We need to prioritize need to have over nice to have.

  9. Chuck says:

    Yes, I picked up on this as well. Perhaps their town hall should be reviewed for surplus opportunities.

  10. Susan says:

    It would appear from the streaming of budget debate that a certain Councilor is chomping at the bit to see the Picton Town Hall sold. Fail to understand how so many halls are maintained by the County, but Picton’s historic gathering place is on the chopping block.

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