January 17, 2020, Simcoe, ON – Mayor Kristal Chopp wants residents to be prepared for some very difficult discussions about Norfolk County’s budget.
Chopp characterizes 2020 as the beginning of a multi-year plan to fix the County’s financial issues, but warns the process will be painful.
It will almost certainly include a double-digit budget increase, before Council can return to more palatable inflationary increases.
“Taxes have been kept artificially low, while services have continued to increase, for too many years,” says Chopp. “Not only is that unacceptable, it’s completely unsustainable – for those on fixed incomes, for those precariously employed, for everyone. This Council needs to make the tough decisions on service reductions now in order to get the County back on track toward more acceptable annual budget increases.”
Without a change in course, the County’s debt – which currently sits at around $54M – is projected to balloon to more than $157M by 2022.
Staff have prepared a bare-bones budget which includes a number of recommended service reductions, which if approved would result in a budget increase of approximately 12.2 percent.
If Council does not move ahead with staff’s proposed cuts, the increase will be 14.5 percent.
The largest portion of the levy budget increase is the result of past actions over which this Council has little control: previous budget commitments, skyrocketing debt payments, and years of unrealistic revenue and spending estimates – all in addition to annual cost increases.
Council will also need to address the County’s significant capital needs in the 2020 budget.
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 County has been relying on reserves to keep taxes artificially low, but the practice has left it without many options or much room to maneuver.
“I’m as frustrated as anyone about the situation we’ve inherited, but it’s this Council’s job to clean up this mess,” says Chopp. “We promised transparency and action on the issues facing Norfolk, and we intend to deliver on that promise – even if the decisions we make are unpopular with some.”
Norfolk’s diversity is one of its greatest assets, but unfortunately it also poses some unique challenges, in that its population is more geographically spread out than most other municipalities. For example, while each household in Brantford supports the cost of approximately 27m of paved road, households in Norfolk must each shoulder 134m (and the associated infrastructure, plowing, repairs and maintenance costs that go with it).
Councillor Chris Van Paassen, chair of Norfolk’s budget committee, says alternate service models – for instance, putting some programs or facilities into the hands of community groups – could be a creative solution to some of the financial issues the County faces.
“We’ll need to consider anything and everything if we’re going to right this ship,” he says.
Given all of this, Chopp says she knows people in the community are questioning the logic of the recent purchase of land for the proposed ALL Norfolk Community Centre.
“We need to put Norfolk County back on solid financial ground, and that includes strategic planning for the future,” says Chopp. “We want to take advantage of the opportunity to invest in the long-term health of our community, but we have to be smart about it. That’s why we included special conditions – such as a “buy-back” clause – on the purchase of land meant for the ALL Norfolk Community Centre.”
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.
Chopp also notes that the proposed community centre is an example of the strategic reinvestment of County spending, as the new, multi-use centre would replace a number of inefficient, outdated facilities that are not sustainable for Norfolk County.
“If we’re given $34M by the provincial and federal governments, we’re going to take it,” says Chopp. “And by combining that with the dollars we will spend anyway to maintain a number of aging buildings, we’ll build a brighter and healthier future for this community.
“We’re going to keep advocating for Norfolk County at all levels of government. The goal isn’t to stop investing in the community – it’s to make smart investments in the community, with a plan for the future. But we need to do that while also living within our means.”
Operating budget deliberations will take place January 28-29, in Council Chambers. The public is welcome at the meetings, and they will also be livestreamed at norfolkcounty.ca/watch. The proposed budget documents can be found here.
Fast facts – 2020 budget
- Council has made returning Norfolk County to financial sustainability a priority, and will consider all options in order to do so, including:
- Alternative service-delivery models
- Land and surplus facility sales
- Service reductions
- Staffing reductions
- The largest portion of the 2020 budget increase is a result of commitments made in previous years, previous financial practices and cost increases that are beyond Council control
- From 2015 to 2018, Norfolk County increased its financial deficit from $3M to $19.8M
- From 2015 to 2018, tax revenues increased an average of $3.3M/year, while Norfolk County’s expenses increased an average of $4.6M/year
- Only those proposals critical to County operations or necessary for creating efficiencies will be considered as New Business Initiatives at the budget meetings. These include investments needed to keep up with demand for Paramedic Services and resources for the digitization and modernization of County services
It will take more than one budget in order to return the County to solid financial footing
