/Bobcaygeon Road project out of budget

Bobcaygeon Road project out of budget

By Chad Ingram

Minden Hills councillors removed the reconstruction of Bobcaygeon Road from the township’s 2021 budget during their fifth and final round of budget deliberations on Feb. 25.

Council has landed on a tax levy increase for the year of 3.75 per cent, which equates to a residential tax rate increase at the lower-tier level of 2.6 per cent. This equates to an increase of $11.47 for every $100,000 of assessment, assuming a property has not experienced a change in assessment since 2020.
For commercial properties, that would mean an increase of $17 for every $100,000 of assessment.  Residents will have a chance to weigh in on the draft budget during a March 11 meeting.

Councillors ultimately decided to remove the reconstruction of Bobcaygeon Road – a $2 million project that would have been paid for through a loan – from the draft budget. The draft budget contained millions in borrowing, and both Councillor Bob Carter and Councillor Pam Sayne have reiterated throughout discussions that they were concerned about becoming too reliant on large debentures, and the consequences that increasing loan interest would have for taxpayers down the proverbial road.

Staff had been asked to provide scenarios including and excluding the Bobcaygeon Road project as part of the fifth round of budget discussions.
“Bobcaygeon Road is the big ticket thing…but to me it’s a little bit like holding water back behind a dam,” said Mayor Brent Devolin. “At some point the hit’s coming.”

“This is an unfortunate circumstance in that we look at budgets on an annual basis,” said Carter. “And in this case, because of the decisions we make this year, as [finance director] Lorrie [Blanchard] has pointed out, almost nothing that we’re going to do is going to affect the 2021 budget by any material amount. And so we look forward to 2022. But when she looks at 2022, that doesn’t consider 2023.”

Carter noted other projects – such as a $1.5-million reconstruction of Scotch Line Road – would also have to be completed before long, likely in 2022 or 2023.
Council has also used large surpluses from 2019 and 2020 – both in the neighbourhood of $1 million – to pay for projects in order to keep tax increases down.
“We have taken our 2019 surplus and our 2020 surplus and we have split it to reduce taxes in 2021 and 2022,” Carter said. “We’ve assumed we’re going to reduce [the surplus] by about $600,000 in each of those years, and that’s great.”
“But that means in 2023, that $600,000 is no longer there,” he continued.  

Carter also noted the township’s new arena and recreation complex, once operational, would carry annual debenture payments of approximately $650,000, and annual staffing costs of approximately $250,000.
“I cannot support borrowing $2.1 million to do Bobcaygeon Road this year,” Carter said.  

Sayne said she supported Carter’s point.
“I think finally the chickens are coming home to roost with some of our initiatives, and we’ve got to really pay attention,” Sayne said. “ … I would really like to see the roads assessment done before we start moving ahead.”
“I’m the last one that likes to hold back on roads,” Sayne continued, “but, in this case, until we have that full plan and we can get a better sense of our funding options, let’s try to hold the reins on some things.”  

Devolin then asked for comments from other members of council, and was met with momentary silence.
“This is a seven-person decision,” Devolin said. “Nobody gets off the hook.”

Councillor Jennifer Hughey ultimately agreed with Carter.
“I agree that it could be difficult to spend money that is loaned to us when an interest rate could change,” Hughey said. “Again, like Councillor Sayne said, I am very much a proponent for roads because it’s the thing we get the most complaints for. But we also get a lot of complaints for the increase in taxes. So, I would support Councillor Carter’s view.”

Councillor Ron Nesbitt agreed. “I think we have to go with Bob, too. I think we have to use our head on this,” Nesbitt said.

Council ultimately unanimously endorsed the 3.75 per cent levy increase.