2020 Tax Budget
2020 Budget: Frequently Asked Questions
The 2020 levy-supported operating budget has been described as one of Norfolk County’s most difficult budgets. Council had to make some very difficult decisions in order to put the County back on track toward financial sustainability.
As part of the plan to fix Norfolk’s financial issues, staff presented Council with an approach that included a significant tax increase to ensure core services were maintained along with a wide range of cost-cutting options to mitigate an even larger tax increase.
The 2020 levy budget saw an increase in total spending rise from just under $90 million in 2019 to just over $100 million in 2020. This is one of the larger budget increases in the County’s history and one that could have been larger if it was not offset by a number of cuts across a wide range of services.
These cuts included closing museums and arenas, reducing winter maintenance levels, and reducing staffing levels in a number of departments.
Final Budget Documents2020 Final Levy Supported Operating Budget
2020 Final HNHU Operating Budget
Proposed Budget Documents
Below are some of the most frequently asked questions about this year’s budget.
Does Norfolk County really have significant financial issues?
Yes. Norfolk County has a history of allowing its expenses to outstrip its revenues. From 2015 to 2018, these expenses increased an average of $6.2M per year, while revenues only increased an average of $4.4M per year. This – and other past actions – has left Norfolk with approximately $81M in debt. This number was projected to balloon to $157M by 2024.
Other past actions contributing to this year’s budget include previous budget commitments, skyrocketing debt payments and years of unrealistic revenue and spending estimates.
Adding to the financial difficulties is the fact that Norfolk County’s reserves have been depleted in order to offset large operating budget shortfalls and fund critical infrastructure repairs and replacements over the past number of years. The Capital reserves will be in a negative balance of approximately $13.8M.
The situation worsened with the recent downloading of costs by the Province onto municipalities, particularly in public health.
When did Council first become aware of these issues?
Council first became more fully aware of the depth and breadth of these financial and other issues during the budget process as part of the work conducted by staff and an outside consultant. The financial issues along with some critical infrastructure issues were presented by staff over the fall and in January of this year and a multi-year plan to address the issues was also presented.
How will Council return Norfolk County to financial sustainability?
This year’s budget is the beginning of a multi-year plan to return the County to sound financial ground. The plan begins with the bare-bones budget staff presented to Council in January, which included a range of cost-cutting options, and new spending only in critical areas. Despite a number of service level reductions, the 2020 budget still resulted in a significant increase in property taxes.
Why is Norfolk County pursuing the ALL Norfolk Community Centre project?
A number of Norfolk’s current recreational facilities are advanced in age, and would require extensive investments – at least an estimated $23M over the next 20 years – to maintain. Building a new facility would end the “Band-Aid” practice of yearly repairs.
Norfolk County has applied for $36.5M in joint provincial-federal funding for a new facility. Immediate ownership of land for the project is required for provincial/federal funding.
Of note: Norfolk County included special conditions on the the purchase of land for the ALL Norfolk Community Centre, including a “buy-back” clause. The clause means that if Norfolk County doesn’t secure provincial-federal funding (a Council requirement for supporting the ALL Norfolk project), the landowner will re-purchase the land at the price the County originally paid for it, and the County would not proceed with the project.
A new community and recreational centre would:
- More than double swimming capacity
- Allow Norfolk County to address programming gaps and wait-list issues
- Allow local teams and leagues to host high-level tournaments and competitions
- Offer operational efficiencies, as a number of amenities would be located at one site
- Help remove barriers to accessibility currently keeping some members of the community from enjoying the benefits of recreation
Detailed information about the project – including how the proposed site was chosen – can be found here.
What’s happening to the Langton Administration Building?
Norfolk County currently maintains 10 aging administration buildings that are in poor to critical condition. These facilities cost approximately $2.2M annually to operate and maintain and also will require $7.3M in capital needs over the next ten years. Overall, it is estimated that the 20-year operating and capital costs for 10 administration buildings will total approximately $51.4M.
Norfolk County will be moving away from the use of a standalone municipal office in Langton. Instead, Norfolk will offer enhanced “pop-up” services in both Langton and Port Rowan on a regular, scheduled basis. This way, service will continue to be provided in Langton, while also giving both permanent and seasonal residents access to services in Port Rowan.
Customer service staff currently working at the Langton building will be moved to the busier Delhi Administration Building.
The Langton Administration Building will be declared surplus and put up for sale.
Staff are currently working on a plan and will provide updates as they are available.
What’s happening with museums?
Norfolk County takes its role as steward of county history very seriously, however the significant financial pressures it faces have forced it to consolidate its museum facilities.
Norfolk is closing the seasonal Teeterville Pioneer Museum and the Teeterville Women’s Institute and will declare the buildings surplus.
The Norfolk Arts Centre and Archives will be amalgamated in the current Eva Brook Donly Museum building. The Norfolk Arts Centre closed Feb. 6, and its operations will be transferred to the Donly Museum over the coming months.
Collections housed in the closed facilities remain the property of Norfolk County and will be absorbed into the other museums.
This year’s SoupART Bowls event has been cancelled.
What’s happening with arenas?
Norfolk County cannot sustain the costs of operating its current number of aging arenas, as the arenas are not operating at full capacity and some of the arenas are in need of significant repair. To help reduce costs, maximize the use of our facilities and to accommodate the Seniors Centre group, ice at the Simcoe Rec Centre will be removed. Summer ice will be offered at the Waterford Tricenturena.
In addition, Norfolk County is looking for private or community operators for each of its arenas. Should none come forward, Norfolk will close an arena (in addition to the rink at the Simcoe Rec Centre) in September 2020. The arena to be closed under these circumstances has not yet been identified.
Response to SDHMA
First we would like to thank the Simcoe and District Minor Hockey Association for their recent letter related to the plans associated with Norfolk’s recreation facilities, specifically our arenas. We know that this is a significant issue in the community and to your organization specifically. We hope that you take this letter as an initial response to your organization as well as an invitation for your organization to continue the dialogue with our staff on this important issue in the community. We hope that you will share this response with your organization and its members.
The following provides a summary of the key issues as well as address a number of your concerns that were raised.
The Financial Situation
The state of Norfolk’s financial situation has seen significant discussion in the media so I do not want to discuss this extensively, however staff and Council undertook an approach that saw both a very significant increases in property taxes (more than 8%) while also looking to trim approximately 2% in expenditures over two years in order to address these challenges. The goal of staff and Council is to focus on the long term sustainability of the County and its services, so that there is greater certainty as to the provision of these important services for years to come rather than just for the next year or two. The financial and infrastructure challenges of the Community will not be fixed with one budget and this will be a multi-year challenge for the County.
The Importance of Arenas and Recreational Services
Staff and Council recognize the importance of recreational services and arenas for the community. In 2019 the total expenditures for arena operations was approximately $3.031 million and total revenue provided by the users was $1.055 million, as such $1.976 million of the cost of arenas were supported by the tax levy (the property tax payer). For the 2020 budget year Council has budgeted expenditures just under $2.85 million, with tax levy support of approximately $1.77 million. As such there is still a significant commitment by staff and Council to fund arenas, however the intent is to reduce the amount of total taxpayer funding for the arenas in 2021 and future years. Additionally, there needs to be a longer term solution for the funding of the significant capital costs associated with arenas including equipment replacement as well as major facility repairs.
Staff and Council are fully aware that the operation of arenas will not break even or make money. The challenge is ensuring the right balance of tax levy support and revenue from user fees for the arenas.
The Simcoe Recreation Centre Decision
The removal of ice from the Simcoe Recreation Centre was a multi-faceted decision. The County also faces a significant challenge with the Seniors’ Centre in Simcoe. The facility is in desperate need of critical repairs and cannot be relied upon to provide services to seniors, in fact parts of the building are currently closed for health and safety reasons. This is not a situation that the County could delay in dealing with. The transfer of senior services to the Recreation Centre is being done to address this critical issue while the County awaits on the decision of the funding for the All Norfolk HUB. It should be noted that even if the County is successful in this application it would be years before the seniors could be moved into the HUB and this was too long to wait.
The County understands that this will place more pressure on ice demands in Waterford, Port Dover and in Simcoe’s Talbot Gardens and as such this was a difficult decision. However we believe that with user group cooperation appropriate accommodations can be made for the user groups.
Future Closures or Operational Changes
There are no decisions for the closure of an arena in the near future or for any other changes at this time. Future decisions related to arena operations are to be debated by Council in the fall. Staff will be running a process to solicit options from the community to look at reducing the total amount of tax levy support required for arena operations as well as looking for a solution for the long term financial support for arenas.
Potential Impacts to Operating Models
Your letter indicates the potential move to a Private Arena Management option. Though no option will be excluded at this time it is doubtful that a private for-profit enterprise would entertain the operation of one of the County’s arenas due to their physical state and operational performance.
Staff are currently working on the RFP process. The RFP process will be approved by Council as will the final recommendations from this process (if any). The focus of the RFP is to provide options to look for new ways to engage partners in ensuring the long term sustainability of the arena. There will be an option for a party to partner with the County to operate an arena under a license arrangement with the County. This arrangement will contain a number of restrictions and control elements to ensure the operations benefit the Community as a whole. If a party is selected to operate an arena, the County will continue to support this group with a limited and fixed amount of tax levy support. This provision of support provides the partnership structure and allows the County to have operational influence.
A second option under the RFP is to look for community groups to partner with the County to provide additional financial resources or additional revenue sources for the arenas. This is similar to practices in the County in the past where community service groups such as the Lions or Kinsmen pulled together community resources in order to fundraise for recreational facilities and operations. The County will be looking for creative solutions from user groups and community members to partner with the County to address the long term sustainability of arenas. Additionally, if there are solutions that fall outside of these two broad categories staff and Council will consider other suggestions under the provisions of an unsolicited proposal.
Impacts to your Organization’s Planning and Budget Process
If there are any future changes to the operation of the arenas any previous commitments related to user groups, such as rates or hours of ice time for the arena season (2020/2021) would be accommodated within the new arrangements. As such your organization should undertake its planning and budget process as in prior years.
We recognize that the operational impacts related to the closure of the Simcoe Recreation Centre will impact your plans and we encourage you to work with staff to minimize these impacts.
Impact of Hockey Canada Changes
Changes by Hockey Canada has impacted arenas in a number of ways. The movement to half ice for younger players as well as implications associated with reasonable accommodations for transgender youth place greater demands on change rooms at each of our arenas. The County’s long term capital plan has recommendations for additional capital expenditures to create more change room space to accommodate this increased demand, however this just adds to the existing financial pressures on the arenas.
The intent of Hockey Canada’s changes is to provide improved skills development for youth players and the County believes that by working together with Hockey Canada and your organization we can meet the intent of improved skill development without unduly burdening the taxpayers of the County.
Tournament & General Usage
The County supports the use of the facilities via tournaments due to their economic benefits and increased utilization of County assets. The County feels that existing tournaments can be accommodated with co-operation of the user groups and by looking to utilize all of the County’s assets. There is the opportunity for greater use of the combined facilities. Total utilization of the County’s six arenas has remained relatively steady over the last three years:
2017 – 9,840 hours of total combined ice usage
2018 – 9,811 hours of total combined ice usage
2019 – 9,551 hours of total combined ice usage
User groups need to be aware that the amount of ice that is booked by major user groups and then returned within the 72 hours notice deadline totaled 994 hours of unused ice during the 2019/2020 season thus far. These are hours become unmarketable to other user groups as there is not enough time for County staff to solicit other users.
Additionally, as the County looks to re-focus its Economic Development and Tourism strategy, increasing the support for sports and recreation tournaments that generate over-night hotel demand will be of significant interest to the County and we will hopefully be able to work with your Association on this.
We understand that these changes are difficult for your organization but I would like to stress that the County is trying to act appropriately balancing a number of competing demands while developing a longer term strategy to correct the financial difficulties of the County and ensure long term sustainability. We look forward to working with you and your organization to provide quality services in a sustainable manner in the County.
Bill Cridland, General Manager
What’s the plan for the Seniors Centre?
Members of the Simcoe Seniors Centre have long wanted to move out of the aging Pond Street facility (built in the 1800s) they currently use. To address their concerns, Council has directed that the group be moved to the Simcoe Rec Centre, and the building on Pond Street be declared surplus and put up for sale.
Staff are currently working on a plan for this move, and will provide updates as available.
Is Norfolk County still committed to supporting economic development and tourism?
Absolutely! As part of the 2020 budget, Council voted to reposition the Tourism and Economic Development department. Staff will be directed to put their focus on attracting much-needed outside investment to the county and building partnerships within the tourism industry.
Norfolk County will be developing a roadmap for the future of the department, and will provide updates as they’re available.
The County’s already-planned economic development symposium, scheduled for February 13 at the Aud in Simcoe, will go ahead as scheduled.
How have the Province’s changes to public health and Ontario Works funding affected Norfolk County?
Last year, the provincial government announced that it was changing the public health cost-sharing arrangement and funding for Ontario Works, leaving municipalities to cover increased costs.
The combination of these changes and Norfolk’s own financial issues has resulted in the need to restructure in Health and Social Services (a Norfolk County division that serves both Norfolk and Haldimand counties).
A number of changes were made to Health and Social Services’ organizational structure, resulting in the overall reduction of one non-union position and two part-time employees being in a layoff position. A new program manager position will be filled by a qualified nurse.
The changes in Health and Social Services are not expected to have an impact on the public, and core services continue to be provided by Health and Social Services. Other services continue to be available in the community. These include one-on-one sexual health services and smoking cessation programs. Sexual health services provided in schools will continue to be provided by Health and Social Services.
Health and Social Services will also be revising the service-delivery model for its Family Home Visitor program.
Does reduced winter maintenance levels mean the roads won’t be plowed?
Norfolk will continue to provide winter control services – including plowing and salting – on more than 2,000km of roadways across the county.
Starting in November 2020, however, Norfolk will bring its service levels in line with provincial maintenance standards. This means that Norfolk’s Roads crews will prioritize the plowing of high-traffic roadways, and will minimize its reliance on staff and contractors working overtime.
What’s going to happen with Norfolk’s community halls and centres?
Norfolk County currently maintains 16 aging halls and community centres – largely in poor to critical condition – and cost approximately $775,000 annually to operate and maintain. These facilities will require $6,500,000 in capital needs over the next ten years.
Norfolk County plans to offer select halls and community centres to community groups and other organizations for a nominal cost, with the right to purchase the property back at the same nominal amount. If there is a lack of interest in the identified properties, they will be closed, declared surplus and sold.
Norfolk County will provide updates when select facilities have been identified. The hall(s) and/or community centre(s) to be offered to community groups have not yet been identified.
What's happening to the Port Rowan Harbour Marina?
The Port Rowan Harbour Marina is a seasonal facility with 40 slips, 2 transient docks and a public boat launch.
As part of Norfolk’s plan to return the County to financial sustainability, staff presented Council with a variety of options during the 2020 budget deliberations. This included a plan to transition the Port Rowan Harbour Marina – which operates at a loss – into a passive, non-supervised marina. This will allow Norfolk County to continue providing service to area boaters while reducing the costs associated with operating the marina.
The boat ramp and transient docks will be self-monitored, and Norfolk County staff will continue to regularly cut the grass, empty garbage cans and oversee weed control.