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Council’s request of $3 million in budget savings unlikely without unwanted cuts to services

The municipality will be hard-pressed to find $3 million in savings from the upcoming 2024 budget without significant changes or cuts to services – a move staff note is counter to the County’s new strategic plan and counter to expectations expressed from the community to do more, not less.

PEC CAO Marcia Wallace

CAO Marcia Wallace presented findings from senior staff in a pre-budget exploration of possible savings to council members at their committee of the whole meeting Thursday.

“As this report illustrates, staff have found various areas related to revenue, modernization, staffing, service delivery and reserves that are on track to identify savings for the 2024 budget,” states Wallace. “We have not, however, found adequate savings to meet the budget reduction target of $3M or 10 per cent” (about six per cent of the levy) as requested by council in March.

It was also noted that with the provincial government postponing updates of assessments by the Municipal Property Assessment Corporation again, taxes for the 2023 and 2024 property tax years will continue to be based on 2016 assessment values.

In addition, the provincial government also announced it will conduct a review of Ontario’s property assessment and taxation system. The MPAC assessments are the property value numbers municipalities use to collect property taxes.

The CAO noted the lack of updated assessment means municipalities are not receiving as much tax money as they are entitled. MPAC states it has identified more than $41.5 billion in available new assessment across the province.

“Municipalities our size are all struggling with too much cost for the amount of revenue we’re able to generate, so there’s something systematically wrong with municipalities taking on responsibility for housing and poverty and roads and trying to do all that on the back of property taxes,” said Wallace. “If we’re only going to have property tax, (the province) has to let us have all the property tax we’re entitled to.”

The struggle is felt by municipalities, especially smaller ones, she added “and I think it needs to be re-thought in terms of how we all go together, but we’re not going to solve that as just Prince Edward County.”

Wallace added staff and council do need to be thinking about where to spend the limited dollars and about every decision being made.”

“At some point there will be significantly more tax dollars coming to the municipality but we are a ways off – and maybe not before the next (provincial) election as a property tax hike is not a winning strategy.”

Councillors thanked the CAO and staff for an extensive, thoughtful report which stated minor and modest savings could be found in four areas of revenue generation – modernization and technology, staff and service delivery along with how reserves are used.

In light of the challenges in meeting the budget reduction target, staff recommend the 2024 budget dates be changed to better facilitate conversation about cumulative costs of both the operating and capital expenditures – moving to Dec. 4-8 instead of split up into two separate gatherings in November and December.

“In mid-November, budget materials will be released to council and the public along with the launch of a public information campaign on “where your money is spent” – a plain language explanation of how tax dollars are allocated.

The report also examined alternative options – some of which showed possible savings in future years, but were not able to be in place for the 2024 budget year and some that would first require capital investment.

Examples include AI technology being used in some municipalities to support drive-by parking enforcement, and a four-day work week model which it was noted would also require a reduction in services.

“While work from home options were used throughout the pandemic, it is generally felt by management and staff alike that a hybrid model with smaller workstations and some work from home is a better option and would require less total space than a full complement working at home.

There are also some office-based positions that cannot be done remotely. As part of the Building Condition Assessment staff are considering options to better allocate staff space and more effective use of municipal buildings – reducing the need for leased space – but this would not be achieved in time for the 2024 budget.”

Some discussion related to staffing questions resulted in plans to meet in camera to continue discussions that could involve identifiable staff.

Filed Under: Local News

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