County budget 2021 begins with overview, and options to help COVID-weary residents

The County’s 2021 budget deliberation began Monday night with an overview, and some options from the municipality’s CAO that could assist COVID-weary residents.

CAO Marcia Wallace’s report provided context for this week’s budget discussions, identifying the impact of the pandemic on the 2020 budget, and offering council options to consider that do not raise the levy, but could help businesses and residents in 2021.

Though some 15 per cent of residents, and 13 per cent of businesses are in arrears for this tax year (and fewer in both sectors behind on utility bills), the municipality’s CAO reports Prince Edward County’s cash-flow was managed effectively during the pandemic.

“Deferrals of taxes, an exemption on tax and water bill penalties and decreased revenue put a strain on the County’s cash flows, particularly in the early part of the pandemic,” stated Wallace, but overall, the municipality was able to meet all its financial obligations in 2020.”

Marcia Wallace, Prince Edward County CAO.

Council is being presented with a tax-supported operating budget of $60.2 million and a capital budget of $9.7 million. The proposed rate-supported operating budget for water and wastewater services is $8.8 million and the rate-supported capital budget is $6.6 million.

Wallace notes the deferral of final tax bills and cancellation of penalties and interest this year resulted in a $300,000 loss of revenue (among other losses). Exemption of penalties and interest represents $50,000 in typical annual revenue.

All the losses, added Director of Finance Amanda Carter, do affect how the province determines the County’s ability to borrow for the next year, not unlike the way a bank seeks solid income for loans.

There were approximately 16,000 interim tax bills mailed out in March this year.

“Of the 14,940 residential tax accounts, 2,204 are carrying an arrears balance in 2020, which represents 15 per cent of all residential accounts,” Wallace states in her report. “Of the 855 business tax accounts, 112 are carrying an arrears balance, which represents 13 per cent.”

In the same time period, the municipality issued approximately 8,100 utility bills. Of the 2,573 residential utility accounts, 204 (4.5 per cent) are in arrears, while eight out of 100 (eight per cent) of utility business accounts are in arrears.

Councillor Phil St.-Jean stated he fears the impact of the pandemic will continue through 2021.

Wallace’s report notes some property owners are concerned about longer-term liability they will have for water bills unpaid by tenants as they are ultimately accountable for arrears and are asking the municipality to collect on the unpaid bills.

She also noted that residents relying on federal and provincial programs are concerned about assistance programs during the pandemic that will expire or be re-framed.

“Prince Edward Lennox and Addington Social Services (PELASS) is attempting to fill this gap by using Social Services Relief Funds provided by the province to help those in need pay for things like property taxes and water bills,” her report states.

She suggests council could choose to reinstate penalty and interest rates at 50 per cent below the maximum rate, or, develop a one-time grant program to support residents struggling to pay taxes or water bills. Another option is developing a grant program to assist residents to navigate tax and benefit opportunities, such as with the current support of the free of charge Prince Edward Learning Centre tax clinics.

Her options presented, she said Monday, can be examined as council makes its way through the budget.

“At the end of the conversation this week you can ask ‘what does the community get?’ and you may see what else the community needs, when you know the rest of the impact of the budget.”

Early in the pandemic the municipality also allowed free garbage pick up which cost the municipality $76,000, due to waiving the $3 bag tag fee.

The municipality also saw losses of about $616,000 from the closures of recreation and municipal offices until July 2020. Revenue remained low due to restrictions on gatherings.

Wallace suggested continued assistance to May 2021, to businesses, including offering access to municipal buildings (museums, Crystal Palace and arenas) free of charge to not-for-profit or pubic health sectors to host events or activities within public health guidelines. Current requests seek spaces for baby and new parent workshops, blood donor and flu clinics and the COVID-10 screening centre.

She also noted staff could create a Community Improvement Plan to repurpose funds to support small businesses struggling to pay rent or taxes or water bills, who are ineligible for other funding.

“An application-based grant program could be developed to repurpose existing funds typically found in the municipal budget, for the 2021 year,” she said. “This could include all or a portion of the funding allocated to the Community Improvement Program, currently $50,000 in the 2021 budget. These funds have been used in the past for heritage related activities, but take up was $24,000 in 2020, and $9,000 in 2019 respectively.

“As well, additional funding lines for community grants, housing or food could similarly be apportioned to a new CIP program to support business as a one-time need in 2021. Such a program could have eligibility based on proof of lost revenue (compared to previous years) and set up with a ceiling limit. For example, a 25 per cent relief of municipal taxes could equate to around $700 per business and could support 127 customers at $88,900 of funding.”

Options supported by council would come back in a report from staff showing program criteria, funding mechanisms and implementation.

In other 2020 budget notes, Wallace noted a $588,319 spike in pandemic-related costs at HJ McFarland long-term care home was offset with a $666,570 grant from the province.

The County also incurred unbudgeted costs of $414,812 related to personal protective equipment, signage and increased staff for COVID-specific work and creation of physically-distanced spaces. That was also offset by provincial funding of $1,676,500 which will continue to be used in 2021 as the pandemic continues.

Presentations continue over four days. As well as Monday night’s overview of the 2021 budget, Carter will make presentations during the day sessions Dec. 8-10, to take council through the budget in greater detail.

The deliberations are being held at Highline Hall at the Wellington and District Community Centre with no public attendance allowed due to COVID-19 protocols. The meetings will stream live on the County’s YouTube channel and live updates will be tweeted @Shire_Hall and using #pecbudget.

Click here to view the 450-page draft 2021 operating and capital budget