top of page
Search
  • Writer's pictureESSEX FREE PRESS

County approves 2024 Budget with 4.95% increase by taking $403K out of reserve

by Sylene Argent, Local Journalism Initiative

Members of Essex County Council resumed 2024 Budget deliberations during the regular meeting last Wednesday evening. A 4.95% tax increase was passed, taking $403,000 from the Rate Stabilization Reserve.

 2024 Budget Background

Inaugural Budget deliberations took place the week prior, which ended – after a nearly six-hour discussion on the document – with Essex County Council asking Administration to try and further whittle down the tax increase from 5.27% to 4.95%. This would be a $403,000 reduction to the proposed budget.

  Originally, Administration proposed a 2024 tax increase of 6.13%.

  Before changes, the County Operating Budget was originally submitted as $86.9M. The County Capital Budget was submitted as $46.7M. In total, the County of Essex responsibility was submitted as $133.69M through the 2024 Budget, up from $123.5M in 2023.

  This would have the tax rate impact for a household valued at $100,000 – assuming no change was made at the 6.13% increase – at $547.31, an increase of $31.60 from 2023.

  At the previous meeting, County Council brought that increase down to 5.27% by removing the 0.5% year-over-year increase ($580,000) to the Windsor-Essex acute hospital reserve, but still funding the annual contribution of $6.3M.

  Removing that year-over-year increase had a 0.46% reduction impact on the budget.

  The other change County Council supported included funding half of the 20% increase – $473,820 – expected for County employee health benefits from the Health Benefit Rate Stabilization Reserve, instead of this being fully dependent on the tax levy.

  It was suggested to spread that cost over two budget cycles, using a 50% buffering of that health benefit increase by pulling $473,820 from the Reserve.

  This afforded for around a 0.4% saving in the tax rate.   

 Admin suggests pulling from reserve

to get down to a 4.95% increase

When returning to discuss the 2024 Budget last Wednesday, and addressing County Council’s request to further reduce the proposed increase, CAO Sandra Zwiers said Administration prepared a budget document that they believe will not only maintain levels of service but to maintain the quality of service.

  Prior to bringing the Budget to County Council, Administration considered requests submitted by department. Had all requests been added, the tax increase would have been 8.65%. That meant having tough conversations around the table, and prioritizing needs, Zwiers commented.

  She added that the 2023 Budget was approved with a 3.81% increase. As the year continued, inflation rose as high as 8%.

  “While we try to get the crystal ball out to see what costs we are going to [be] during the year, in actuality, looking back – which is always easier than looking forward – [we] fell quite a bit short of managing the inflationary pressures facing us as a municipality,” Zwiers said, adding the goods and services procured at the County are subject to special inflationary issues, such as on massive development projects, put upward pressure on the County to secure goods and services that remain resistant to deflation.

  “This inflated price is our new normal. The 2024 Budget, in part, did attempt to address the fact that we didn’t raise taxes high enough last year to account for that eight percent inflation,” she said.

  When looking at options to cut that $403,000 from the Budget as County Council asked, Zwiers said Administration did weigh the risk of cutting operating and capital expenses.

  “Given the persistent pressures on inflation, the demands for our service, the desire to maintain existing levels of service, and maintain quality of service, Administration does not recommend cuts to operating and/or capital to achieve a 4.95% tax rate increase,” Zwiers said.

  Alternatively, Administration suggested pulling from the Rate Stabilization Reserve which is used to smooth impact of costs year-over-year. Typically, it is used on things that are one time cost items.

  As such, “there is a risk associated with this recommendation this evening,” Zwiers warned, adding Administration does believe taxes need to be raised by that 5.27% on the residential rate.

County Council did ultimately vote to withdraw $403,000 from the Rate Stabilization Reserve to reduce the 2024 tax increase down to 4.9%, with a majority vote of 9-5. Essex Deputy Mayor Shepley, Lakeshore Deputy Mayor Kirk Walstedt, Lakeshore Mayor Tracey Bailey, LaSalle Mayor Crystal Meloche, and LaSalle Deputy Mayor Mike Akpata were opposed.

  It also approved the Net Operating requirement of $132,282,190, with a majority vote of 9-5. Shepley, Walstedt, Bailey, Meloche, and Akpata were opposed.

 Council reaction to

Administration’s recommendation

Lakeshore Deputy Mayor Kirk Walstedt said this was not what he expected in terms of a response to the motion to find a way to further reduce the tax rate. He thought there, instead, would be another look at the nine new hires proposed for the County in this Budget brought up at the previous meeting.

  Melissa Ryan, Director of Finance, noted that it is actually 10 new hires proposed.

  “The public is expecting us to come in with a much more reasonable tax increase. Mortgages are 7%, plus…prices for food, fuel, building materials have all drastically increased, as we know. Some as much as 100%. I think we owe it to the public to make some cuts,” Walstedt said.

  He did not like the idea of pulling from the Rate Stabilization Reserve. He said that was done last year as well.

Lakeshore Mayor Tracey Bailey asked if money is taken from reserves, would it typically be paid back?

  Zwiers said there was no recommendation that evening to replace the funds. She spoke of what is an adequate amount in the Rate Stabilization Reserve in the first place. With what is proposed in the Budget, there is over $12M in that reserve. She said the question that needs to be debated is if that is an adequate amount.

  She added the County’s practice is that a net surplus or deficit runs through the Rate Stabilization Reserve as a default.

  The surplus realized from 2023 was $1.2M that went back into the Rate Stabilization Reserve.

  An Investment Policy will be something the Finance Department will create in the next year or two.

  Essex Mayor Sherry Bondy and LaSalle Mayor Crystal Meloche both echoed Walstedt’s remarks that Administration’s recommendation was not what they were expecting. Bondy hoped to look at possible cuts to external commitments, but realizes that those partners have their budgets set currently and now may not be the right time of year to look at that.

  Meloche was also hoping to get more information about those ten proposed hires, as they will have to be supported in the budget in future years, once they are hired. She also did not think it was appropriate to use the Rate Stabilization Fund to offset the increase, “Because we know those Budget increases will be here again next year.”

  Next year, she would also like to see the budget process revised. Currently, to have each department present and approved, instead of waiting until the end, does not give County Council a chance to look at the Budget as a whole.

  Kingsville Mayor Dennis Rogers added that the way the Budget was presented did not inform County Councillors what items hit the County levy directly or what was being pulled from reserve. That would make it helpful in looking at what items could be cut to make a direct impact on the tax levy.

  Conversely, Amherstburg Mayor Michael Prue believed there was no other choice but to pull from the Rate Stabilization Reserve. He estimated that the new hires, without seeing specifics, would be an average of $100,000 each per year, and asked Council which five they would like to eliminate to meet the amount they wanted to cut.

  He believes this gives Council a breather, and the time to do it right next year. If County Council does not want to see an increase in staffing next year, it should be stated earlier in the year.

  Prue said he did not support the motion at the previous meeting to have staff come back to the table with a 4.95% increase. “We all want to go back and put smiles on the face of the people we represent…every politician wants to go back and say ‘we held the line.’ But, look at those places that have held the line so well for so many years.”

  He spoke of the minimal 10.5% - or could be as high as 16% – increase Toronto is facing.

  All together, just around $3.5M is being pulled from Rate Stabilization Reserve in the 2024 Budget, he noted.

Though the County’s process is to place funds for new hires through the Budget, then hire after a report is approved by Council later in the year, Kingsville Deputy Mayor Kim DeYong said it is hard for her to collect money from taxpayers for positions that have not been justified. Those reports should come before the Budget, so they can be debated during the Budget.

  “I want the Budget to be a result of this Council’s driving of the agenda,” DeYong added.

  Zwiers is open to changing the budget process.

  Bailey moved that $1.2M be pulled from the Rate Stabilization Reserve.

This would bring the Tax Rate down to 4.32%.

  That was the amount Zwiers said was surplus from 2023.

  Tecumseh Mayor Deputy Mayor Joe Bachetti could not support that amount without a report from Administration. He wanted to know how that could impact 2025.

  Zwiers did not recommend pulling more than the $403,000 from reserve. The reason Administration did not recommend cuts to capital or operating is because they weighed the risk and did not believe it was in the Corporation’s best interest to not raise taxes to cover operating needs.

  As the previous Director of Finance for the County, Zwiers said she does regret not bringing forward a reserve and reserve fund policy for County Council to consider. She added the County has historically operated by way of a reserve strategy, but not a formal policy. She believes it is time to ensure the County’s reserve strategy is codified in a policy that sets out appropriate thresholds for various reserves.

  Prue would not support the $1.2M out of reserve as he had not heard a rationale.

  DeYong spoke of how she struggled with the comment the County did not charge enough tax last year, but there was a $1.2M surplus.

  Surpluses are often the result of things not getting achieved, often outside the County’s control, Zwiers said.

  Times are tough, Bondy said. Conversations have to be had with residents about cuts and reducing capital projects, as they, and the level of service, may need to be reduced. The County may have to look at how to work better with municipalities and share resources, “because we can’t keep raising taxes the way we are doing it, because they are getting it on all sides, they are getting it at the municipal level and they are getting it at the County level.”

  Essex Deputy Mayor Rob Shepley spoke of how he did not understand Council’s rationale of being okay to withdraw the $403,000 from reserve, but not the $1.2M Bailey suggested, but wanting to provide $2M to The Bridge that was not in the County’s purview.

  $1 million is being taken from reserves this year and in 2025 to support the construction of 36 tiny homes in partnership with The Bridge in Leamington. The County is also continuing a 20-year commitment to provide $48,000 annually to The Bridge to operate 12 supportive housing units.

  He also noted the additional $200,000 planned to go into the Housing Stock Reserve, to support the long-term renewal plan, could be cut.

  That is why he supported Bailey’s motion. Her motion failed with a vote of 11-3, with herself, Walstedt, and Shepley in favour.

Investigating external commitments

to determine value

Kingsville Mayor Dennis Rogers spoke of organizations, such as TWEPI, where there are County Councillors on its Board and it receives funding from the County, however, there is no reporting back to note what value the County gets for its investment.

  This will be the year to figure out if the County is getting its full value for such commitments.

  Conservations with local municipalities need to be had, Rogers said, to see if their Economic Development Departments are seeing the value in terms of the dollars spent on organizations, like Invest WindsorEssex and TWEPI. Those organizations need to explain what they do. The County then needs to see if the value it invests is good enough to cut those cheques.

  LaSalle Mayor Crystal Meloche sits on the TWEPI Board and noted tourism has become something in Essex County. She noted TWEPI comes before County Council once a year to explain what it is up to.

  Walstedt agreed with looking at this matter, and the process to do so will be discussed.

  For Essex Mayor Sherry Bondy, she would have preferred this discussion take place before the 2024 Budget deliberations. She wants to see the measurables. The County has a lot of marketable things, but she is not sure the County always gets its bang for its buck. She has been speaking about this matter for a number of months.

  Rogers put forward a Notice of Motion, which will be discussed at the February 7 meeting, that will ask County Council to direct Administration to consult with local municipalities to investigate their satisfaction with the services provided to any discretionary external commitment. That those organizations present to County Council and local municipalities to demonstrate the benefit they are providing to municipalities and the value for the money invested by the County. And, that a report come back to County Council on the matter, prior to 2025 Budget.  

  County Council approved the External Commitments section of the Budget, as this department was not approved at the previous meeting, by reducing the contribution to the Windsor-Essex Hospital system by $580,000 and by increasing the contribution to the Windsor Essex County Health Unit by $42,010 as requested.

Budget Highlights:

Additional 16 paramedics for EWEMS, the replacement of eight ambulances and 44 automated CPR devices, and a new shift scheduling clerk.

  Additional staffer at the Harrow library branch, so it can be open for more hours, and a new Assistant Director of Nursing at Sun Parlour Home.

  A $93.8 million construction program, including $58.2 million for capacity expansion and $28.3 million for road rehabilitation projects totalling more than 35kms.

  The rebranding of the contracted Climate Change Coordinator position to a Senior Planner for Climate Initiatives and Environmental Impact Assessments, adding a Senior Planning Consultant, a new Clerk position by separating it from the Director of Legislative and Community Services role, a front desk position, reserve-funded legal student in Legal Services, a full time IT Director, and an IT co-op student for the full-year.

Comments


bottom of page