North Huron spending to rise 3.47 per cent in 2021 budget
BY DENNY SCOTT
North Huron Township Council has approved its 2021 budget in principle with a $213,084 increase, or 3.47 per cent, in spending over the 2020 budget.
Council finalized the proposed budget during a special meeting on Jan. 22 when council decided to change several additions proposed at the last budget meeting, which, alongside some savings found by staff, led to the final increase.
The original proposed budget, presented last month, included a 2.99 per cent increase, said Director of Finance Donna White. At that point, council members made several requests to be added, including a $50,000 fund for an economic development officer; an increase of $100,000 for asset management reserves, which Deputy-Reeve Trevor Seip had suggested could be used for the Howson Dam or other projects, and a $85,000 assessment remediation for the former Blyth public works/fire hall building.
White explained that the original increase proposed by staff, before the additions, was more than $180,000, but it was dropped to $163,084 when staff discovered further savings. She said, with all the changes, the municipality is now looking at an additional $398,084.44 in spending, or a 6.48 per cent spending increase.
Seip suggested council cut the $50,000 fund for the hiring of an economic development officer as 2021, like 2020, may not be a year of growth due to COVID-19.
“I don’t see us having the vaccine to the general public before September or October,” he said. “The idea of trying to bring jobs and development to the municipality [may not go ahead].”
Councillor Chris Palmer said he wasn’t against the funding, but wanted a detailed job description before the municipality moved ahead with anything, saying he didn’t see a need for the position right now.
“We don’t have any commercial land,” he said. “Anything residential has nothing to do with [the proposed economic development officer].”
Palmer said there are a lot of questions left to be asked about the position, including what the officer’s goals would be and the length of the contract. He added that he wanted the current council to present one of its four annual budgets with a relatively “neutral” increase.
Reeve Bernie Bailey said hiring an economic development officer would be a “leap of faith” with a five- to 10-year payback.
“I’ve said openly, this isn’t going to be a girl to take dictation for the BIAs,” he said. “This will be someone who does things.”
He said, despite the pandemic, people are contacting the municipality about land for sale, so someone to field those calls could be an asset. He also said that a “neutral” or zero per cent increase budget isn’t something that exists in his world.
“We can’t afford a six per cent increase in spending,” he said. “Having said that, I don’t think… a zero per cent increase is possible. Someone has to make these decisions.”
Palmer said that the $50,000 economic development expense needs to be viewed as the tax dollars it will take to raise the money to pay for the new position.
“We have to think about the cost benefit – $50,000 is [the taxes from] 20 to 30 homes,” he said. “Year after year, that’s the wages being paid. I’m not picking on the economic development officer. It’s anyone we hire. Please, in the future, we have to be business people. This is a business, a corporation. We have to make sure we run it…. When we hire someone, we have to think of how much it costs to have that person.”
Councillor Kevin Falconer said council should be aware of why the position is needed after presentations from staff showed economic development happening all around North Huron, but not in the municipality itself. “There’s a reason for that,” he said.
Councillor Anita van Hittersum said North Huron needs to have a better conversation with Huron County’s economic development department so North Huron can benefit from the work of the department. “We pay county taxes and they hire officers here and there and everywhere,” she said.
Bailey said the county does help North Huron, but that its economic development department has a county-wide mandate; it is not meant to help individual municipalities. Chief Administrative Officer Dwayne Evans agreed, saying the county has helped on projects like broadband internet initiatives.
Palmer reiterated that the municipality doesn’t have developable commercial land, and until it does, the issue should be put off.
In an attempt to find a solution for the discussion, White suggested removing the $50,000 from the budget and seeing if there were funds available in reserves after the 2020 reconciliation.
“If we have the money in reserves… council could have the discussion then,” she said.
Council agreed with the plan.
Several councillors aired concerns about earmarking any money for the Howson Dam, whether it be used for restoration or removal, as council members, including Reeve Bernie Bailey, had promised during the last election that tax dollars would not be spent on the structure.
Seip, who had originally proposed the increased funding for asset management in general, citing that if the dam were to be removed, residents likely wouldn’t want to fundraise for it, backpedaled on the idea of funding the dam, saying the funds should be left in, but for a more general asset management purpose than any specific project.
“I prefer to leave it [in the budget],” he said. “Our asset management isn’t going away. We can defend that we have a deficit in asset management.”
He said the municipality has $1 billion in assets that will need to be replaced or repaired, including the municipality’s town hall and community centres.
Palmer said if the funds go to asset management in general, that may be acceptable, however any mention of the Howson Dam shouldn’t be made.
“When you mention the Howson Dam, it’s perking the ears of hundreds of people,” he said. “Even I don’t know what [the funds were meant for]. Is it for tearing it out? Or dumped into rehab we haven’t agreed to. It disturbs me.”
Seip said that any asset management spending would need to be approved by council, so the funding wouldn’t specifically be tied to the Howson Dam.
“If council sees fit to move money to the Howson Dam, then this council will have another discussion as it relates to what that money is for,” he said, adding he didn’t intend for the funds to be specifically earmarked for the Howson Dam, but for all assets. “Council directs staff how to use it.”
He went on to say he didn’t want to “perk anybody’s ears”, just prepare for asset management requirements, which includes the Howson Dam.
Van Hittersum said that, following such a difficult year for the general public, council should consider cutting the asset management increase.
“We can look to surpluses [from 2020] to see about a reserve for asset management,” she said.
After more discussion, council agreed to cut the increase in half to $50,000.
Several councillors questioned the $85,000 for the assessment of the former public works building in Blyth, saying it might be a good year to push it off. However, others said the money could be an investment that results in funds coming back to the municipality.
The funds would enable a first, second and possible third phase environmental assessment for the land to determine its future use.
“That's an empty building sitting there,” Councillor Paul Heffer said. “I was led to believe the sale of the property could offset the sand shed [being built at the new public works/fire hall site in Blyth].... It’s going to be money coming back in a sense.”
Bailey agreed, saying his discussions with the Blyth Business Improvement Area (BIA) indicated the former fire hall/public utilities property could be used for housing stock.
“If we spend $85,000 there and take care of that, within two to three years… we could have tax dollars coming in forever.”
After some discussion, however, it was noted that the $85,000 could prove the land couldn’t be redeveloped, leaving its only use as a parking lot, meaning the money wouldn’t be recovered.
Council agreed to keep the $85,000 in the budget, but to fund it through internal borrowing as suggested by White. If the land can be redeveloped, the funds can be recovered, she said, and If not, the municipality will have two years to determine how to pay for the expense.
As a result of the above decisions, council approved a $213,084.44 increase in spending in principle.
With the changes, council approved the budget in principle with it set to return to its Feb. 1 council meeting for final adoption, alongside a tax rate bylaw once information from Huron County and local school boards is made available.
Using those numbers, White informed council that, on an average residential property assessed at $205,000, the increase would have different impacts across the municipality’s three wards.
Due to significant savings in area-rated costs, that average property in Wingham would see a $23.66 increase in taxes for 2021 (from $2,944.16 to $2,967.82). The area-rated savings, White said, are primarily driven by policing reconciliation from the Ontario Provincial Police (OPP). That average property in Blyth would see a $47.70 increase (from $2,285.76 to $2,333.46), also due in part to savings in area-rated costs, while the same-valued property in East Wawanosh would see a $71.06 increase ($2,038.91 to $2,109.97).
Council also discussed cross-border servicing with Morris-Turnberry, saying that changes would need to happen in 2021 to accommodate the fact that there is no longer an agreement between the municipalities, and therefore, no agreed “soft service” contributions from Morris-Turnberry are not guaranteed.
While Morris-Turnberry Council did decide to prorate its contributions for 2021, paying $83,728 of $118,500, based on closure of the soft services like the community centres due to COVID-19, no agreement was in place for 2021 according to staff.
“There’s been no conversation in terms of 2021,” Evans said. “The Deputy-Reeve has indicated the cross-border committee is interested in working towards an agreement. We haven’t heard from Morris-Turnberry for quite some time.”
Council took no action as a result of the discussion.
Seip had previously asked staff to compare staffing levels in 2020 to previous years and was given a detailed explanation of how many full-time staff or full-time equivalents (FTE) are employed by the municipality.
While 2020 will be an outlier, with nearly $1 million in wage savings compared to 2019, the review showed that staffing levels had actually dropped over the past seven years due to full-time positions being reduced in the police, water/sewer and fire departments. White explained how the FTE numbers were generated.
“We have a wide number of part-time staff,” she said, adding the number fluctuates between 100 and 150. “Some of those staff may only work 10-15 hours during a day camp program, so we can’t count that as one staff.”
She said a normal full-time position works 1,950 hours a year.
“We took that total number of hours worked in each of those years by part-time employees, divided by 1,950 and turned it into the full-time equivalent,” she said.
White explained that fire, sewer/water and police had been listed separately due to significant changes in staffing in those areas, especially those tied to the OPP taking over policing in Wingham, water/sewer responsibilities being handled by Veolia and fire suppression and prevention now being handled by a shared chief.
In 2014, with 28.1 FTE positions, eight police, four water/sewer professionals and one full-time fire professional and 38 other full-time positions, there were 79.1 FTE staff employed by the municipality according to White’s report. That constituted total wages of $4,064,287.87. In 2019, the number of staff had dropped dramatically, and wages were around the same value. White reported the municipality had a total of 66.3 FTE positions, including 27.3 part-time FTE and 39 full-time positions with wages totalling $4,071,993.
White reported that wages in 2020 had totalled $3,094,129.52, but, when asked where those savings would be represented, she said there would need to be a full accounting of reconciliations for the municipality because those savings may be eaten up by additional costs caused by COVID-19.
Seip said the information is exactly what he wanted.
“The reason I say that is there is always the indication or belief the municipality is hiring people to do jobs we don’t need to do,” he said. “What this is telling me is we’ve actually stayed relatively close to the same number of staff since 2014.”
Council received the information as part of the budget presentation.