Dufferin County Council will be facing a difficult challenge in its 2016 budget process if they want to appease taxpayers, thanks to the large backlog of infrastructure needs built up over the last several terms.

While currently the gap is sitting at less than $5 million, depending on the path Council chooses to take with the draft
budget, that gap could reach $17 million in infrastructure projects to be deferred to the next term.

At last Thursday’s County Council meeting, County Treasurer Alan Selby presented the draft 2016 budget synopsis and presented several options to deal with the infrastructure gap that staff could be directed to adapt to.

Without any changes to the current draft budget, Dufferin residents would be looking at a tax-hike impact of 9.07 percent for infrastructure out of a total jump in the tax levy of 11.07 per cent, which would show up as a jump of $118 on the County portion of property tax bills for an average MPAC assessment of $338,000.

The infrastructure gap, which is the culprit behind these high numbers, has been caused by a number of capital projects being deferred over the last several years.

“No matter what Council chooses to do, that infrastructure gap is going to grow,” said Mr. Selby. “Even under the most aggressive option, the infrastructure deficit will be $11 million bigger than it is today. Depend- ing on which scenario you choose, will determine just how much bigger that deficit will be.”

He added that this was caused by six years of ‘flat-lining’ capital projects, creating a large backlog that will unavoidably continue to grow in the future and will take many years and many budgets to deal with. The scenarios he presented would help the county pull out of this backlog, albeit slowly, and allow Council to work on a long-term financial plan that would inevitably help prevent another backlog if executed correctly.

Within this year’s Capital Budget, which is looking at a $2.55-million increase over the 2015 budget, nearly $1.8 million of that is just for road projects.

In 2015, Council chose to apply all of the 2014 and 2015 gas tax rebates the County receives to help with the road infrastructure costs, but now that it is drained, they will only have access to the 2016 gas tax rebate.

“This is no surprise,” said Mr. Selby. “We all know that the Capital Budget is 80 percent public works, more or less. We have to try to balance the capital backlog while being cognizant of the fiscal reality we are living in.”

Mr. Selby’s presentation consisted of three scenarios, outside of leaving the Draft Budget as is for the beginning of the process: a Status Quo option, Dedicated Levy for Capital, or a Rate Freeze.

With the Status Quo, the tax rate would stay around the same rate of approximately a three-percent increase over the next three years, equalling an approximate taxpayer impact of 1.5 percent. By the end of the three years, the remaining infrastructure gap would be about $17 million more than it is right now.

The Dedicated Levy presented three options: a Dedicated Levy increase of one, two or three percent. This would mean that at one percent the overall tax levy would rise four percent over the next three years, but five percent with a two-percent increase, and six percent with the three-percent increase. Likewise, with the lowest option, the infrastructure gap would grow to approximately $17 million more, and the highest would see it at $13 million at the end of 2018.

Utilizing the Tax-Rate Freeze scenario, the numbers would be similar to the two-percent increase under the Dedicated Levy option, but would be affected by the MPAC assessments, which will come out for 2017; meaning if the tax-rate hike is frozen at five-percent, and the phased-in MPAC assessment increase went higher than three per cent annually, they would receive addi- tional funds for the projects.

Mr. Selby concluded his presentation asking for direction from County Council as to which path they would prefer to take.

“I want to remind everyone that Council is not committed to any of these options, regardless of which we choose,” said War- den Warren Maycock. “This is simply what we want to direct staff to do so that they can bring the Draft Budget to us in a meeting. After that we would discuss in committee meetings as usual, and go from there.”

Questions were raised about lowering the Operating Budget costs, as well as whether making this decision prior to the MPAC assessments is premature. With the Operating side, the budget would need to be addressed during the committee meetings as usual, but Mr. Selby pointed out that the County Operations budget is usually fairly minimal to begin with.

“I’d really like to compliment Alan on this,” said Councillor Don MacIver, Mayor of Amaranth. “He is extremely thorough in terms of numbers and how he presents, and even how he shocks us in a nice way. The nitty gritty of everything will have to be faced at the committee level, and that is where we will have the opportunity to scrutinize.”

Several Councillors voiced their support of proceeding with Option 1, which was leaving the draft budget as is, and beginning to do the work from there. While it would mean that the required increase in the tax levy would begin at 11.07 percent, it would not necessarily mean this will be the final number residents will be looking at.

Following the direction of Council, County Staff will proceed with preparing the full 2016 Draft Budget presentation, at which point the different County Committees as well as County Council will begin to break it down and choose which projects, items and processes will carry in the final budget.

Choosing Option 1, according to Mr. Selby, means that, at least with the initial draft budget, the infrastructure deficit would grow by only $11 million, instead of up to $17 million.