Blumhagen forecasts a difficult decade of infrastructure costs, tax increases

BY SHAWN LOUGHLIN

According to Huron County Treasurer and Director of Corporate Services Michael Blumhagen, the county is facing a challenging 10 years ahead to maintain its level of service and quality of infrastructure and will need significant investment in order to do so.
Blumhagen discussed this with council at its June 4 meeting, telling council that maintaining a low tax rate in the coming years will create an unsustainable scenario in which the county will have to cut its level of service or drop its standards for infrastructure through to 2045, having to raise a significant amount of money over the next 20 years.

 

As a result, he told council that, to keep up with these requirements, council would have to raise the levy by 2.99 per cent per year for the next decade just to keep up with infrastructure investments, to say nothing other budgetary requirements, pressures or increases, not the least of which are inflation and continually rising wages for county staff.

 

“Staff are currently estimating that $566 million in current dollars, or $789 million adjusted for estimated inflation, will be required in infrastructure investments through to 2045. This will require a significant commitment by county council to ensure appropriate funding strategies are in place to meet these requirements. Significant gaps exist in current funding,” Blumhagen said in his report to council, noting that recommended tax increases for the next two decades will be front-loaded, with more needed within the first 10 years than in the next.

 

“Based on the sample strategy... an average annual levy increase of 2.2 per cent would be required annually for the next 20 years to ensure sufficient funds are available. However, over the next 10 years, an increase of 2.99 per cent is required annually. This increase covers both county-supported capital funding increases, along with principal and interest payments for debt. Also, this increase is above and beyond operational pressures, such as labour, that we incur at the county.”

 

He added that the county’s strategic asset management policy is due to be reviewed every five years. He also noted that the proposed emergency medical services (EMS) base in Seaforth has been included in the proposal for council’s consideration.
“Based on this draft plan, an increase of 2.49 per cent is required in 2026, and 2.96 per cent in 2027, in part due to financing requirements in 2027 if proceeding with a proposed EMS base in Seaforth,” he said in his report. “There is no financial impact in approving this report, as it will provide inputs into the 2026 budget, to be approved by county council at that time.”

 

He reiterated to council that the above considerations would be factored into next year’s budget process and subsequent deliberations when the time comes, but confirmed that “significant investment” is going to be required within the county over the next 10 years.