Highway 49 in Prince Edward County. (Photo: Michael J. Brethour)
Prince Edward County is getting on board with an initiative aimed at closing the fiscal gap facing Ontario municipalities.
Tuesday night, council approved joining the Association of Municipalities’ ‘What’s Next Ontario?’ strategy that will see the development of a shared vision and plan for municipal governments to have the firm financial foundation needed to meet their responsibilities today and over the long-term.
AMO concluded a 10-year projection of municipal expenditures against inflationary property tax and user fee increases shows there will be an unfunded average annual need of $3.6 billion dollars to fix local infrastructure and provide for municipal operating needs.
“There is a crisis with the infrastructure requirements in almost every municipality in the province of Ontario,” said mayor Robert Quaiff.
Mayor Quaiff has been very vocal at Queen’s Park in meetings with various ministers regarding funding proposals for the County’s vast roadways in dire need of repair, in particular $21 million needed to fix County Road 49. The County will begin its budget deliberations in early December where it will again grapple with a projected infrastructure debt of $100 million over the next 20 to 25 years.
AMO conducted a detailed financial analysis of municipal revenues and expenditures, projected out to 2025. This analysis found that if municipal governments were to rely mainly on property taxes, with all else being equal, they would require an estimated: 4.51% annual property tax increase for 10 years to fund existing programs and service levels, plus 3.84% annual property tax increase for 10 years to fund $60 billion infrastructure deficit.
AMO’s report states recent polling suggests 76% of Ontarians are concerned property taxes will not cover the cost of infrastructure while maintaining municipal services and 90% agree maintaining safe infrastructure is an important priority for their communities.
In other infrastructure news, council authorized the submission of a loan application in the amount of $6.2 million dollars to the Ontario Infrastructure and Lands Corporation for loans to provide funding for capital projects approved in 2014 and 2015 capital budgets.
Of the borrowed funds $4.5 million is for the construction of the new Picton Department projects, $653,000 for water projects and $980,000 for wastewater projects.
When questioned about the timeline for borrowing now for two year old projects, Chief Administrative Officer James Hepburn explained the projects were funded through ‘cash flow’ and they are borrowing on a temporary basis so the municipality doesn’t have an issue going forward.
The loans will be debentured early 2017.
The current interest rate (October 18, 2016) for a construction loan is 1.45 %
and 2.94 % for a 20 year term debenture.
Hepburn said the cost of servicing the debt on the new Picton fire hall works out to $300,000 for 20 years.
