By Mike Renzella
The Haldimand Press
HALDIMAND — Haldimand County announced the 2023 Tax-Supported Capital budget at a session on Thursday, February 4, 2023.
The second of three major County budgets, the capital budget outlines infrastructure spending throughout the current year and forecasts project and maintenance-related expenses over the next decade.
In support of the budget, taxpayers can expect a 1% increase on their property taxes in 2023, generating an additional $762,000 in funds for the County in the face of growing inflationary concerns.
Despite a lengthy list of in-development or planned new projects and repair/replacement jobs on existing infrastructure, the County’s financial department is warning the public to expect a rollback on planned projects as inflation takes a bite out of existing financial reserves.
“If inflation continues to exceed what we’re currently indexing, we will have to readjust the program. What it means is we will not be able to do as much as we’ve done in the past,” said County CAO Craig Manley.
He said there were a “couple areas” where the County is starting to run into issues, explaining, “The effect of inflation and some increased capital programs has really outpaced the additional room that we gain every year, inflation being the significant driver.”
Projected depletion of the County’s Capital Replacement reserve fund
A chart showing the County’s Capital Replacement Reserves, which sat just under $45 million in 2021, is now at just under $30 million, with steady dips expected that could bring the reserve fund to a negative balance by 2030 before rebounding again in 2032.
“Over the past number of years the County … ramped up its capital program. That was to address infrastructure issues…. Due to the low-interest environment, we could get more done relative to the cost,” said Manley. “When you ramp up a program, people come to expect it as the standard. I think we’re probably heading into deliberately trying to slow it down a bit because of the interest rates and the funding.… It’s easy to make adjustments to add more – it’s a little harder to reduce it.”
He said two aspects of the County’s reserve fund spending will likely see impacts in the coming years: the Roads Reserve and the Capital Replacement Reserve funds, used for items including servicing Grandview Lodge in Dunnville and maintaining community halls and recreation facilities.
“There were more road projects being planned than there was money available over the 10-year period. Engineering staff went back and have fit the program into the funding,” said Manley.
He said that in addition to inflation causing problems, certain grants are coming in lower than expected, with Manley highlighting the Provincial Community Infrastructure Fund grant, which came in at $800,000 less than the County had hoped for this year: “If you extrapolate that over a 10 year program, that’s a significant amount of money.”
With external grants accounting for a fifth of all funds utilized by the County toward infrastructure projects, Manley is warning that the lack of predictability will likely lead to certain projects being impacted, either through a more limited scope of work, or a more drawn-out financing process to limit their larger impact on the County budget
In terms of the capital replacement reserve, Manley said that planned ‘soft-service’ projects, such as new recreational trails or servicing Hagersville’s in-the-works Active Living Centre, in addition to an increased County focus on community services, will come with impacts that will need to be considered when planning budgets beyond 2023.
He noted that despite the causes for concern, the County remains in a positive financial position, adding, “We want to have a plan that is as reliable and predictable as possible.”
Financial Services Manager Mark Merritt said that the County will need to start preparing for further inflation-based impacts “sooner than later,” noting that spreading projects out over a longer timeline could impact planned projects as early as 2024.
“We’re fortunate we do have those reserves available,” said Merritt. “If we didn’t have those available and we lost grant funding, then we’d have significant problems with replacing infrastructure when needed to be replaced, doing needed maintenance.”
He expressed concern over the depletion of certain County reserves over the 10-year forecast, noting, “They’re earmarked for very specific replacements and expenditures…. We’re trying to put the money away now before we have to replace infrastructure.”
Major items on the capital budget timeline include:
- $20 million toward roadway and active transportation improvements such as paving, road reconstruction, tar and chip resurfacing, gravel road conversion, sidewalk/curb replacements, street lighting, as well as bridge/culvert rehabilitations/replacements, and other structure-related projects;
- $2.9 million to complete the Gravel Road conversion program, with the bulk of the work to be completed in 2023;
- $2.1 million toward the purchase of one new pumper and two new tankers fore fire stations and $520,000 for two new ambulances;
- $939,000 toward enhancing municipal arenas, including upgrades to refrigeration equipment/concessions and building infrastructure;
- $677,000 combined toward library and museum services, including the installation of an elevator at the Dunnville Branch and stair riser/accessible washroom and lift at Edinburgh Square;
- $948,000 toward tree conservation and re-forestation initiatives, such as the Downtown Street Tree Revitalization Program and general maintenance, removal, planting, and care of urban trees;
- $394,000 for park and trail-related projects, including bleacher/players’ bench replacements in five locations, paving of the Jarvis Meadow Pathway, and Trails Master Plan Update;
- $378,000 toward the Community Halls Partnership Program, with funds allocated to facility repairs and necessary maintenance;
- $211,000 toward mechanical/electric maintenance and repairs at municipal pools;
- $10.4 million in combined expenses for the new Library + Active Living Centre in Hagersville;
- $756,000 for a cycling lane along River Road;
- $2.6 million combined cost to replace the Cayuga and Hagersville skate parks in 2026 and 2027;
- $7.2 million for replacement of Dunnville’s fire station in 2026.
“The 2023 Capital Budget was prepared in a difficult economic climate and faced a number of challenges in terms of balancing current priorities, future needs, and the types of services and facilities we know are desired by the community,” said Manley in a Haldimand County press release following the presentation.
He added, “Things like inflation, the rising cost of contracted services, increased growth, and uncertainties with regard to federal/provincial funding have all had a big impact on our capital program. Despite this, the 2023 Capital Budget and long-range financing plan outlines a strategy that ensures community needs are met and that will allow us to pivot if unforeseen needs arise.”
Mayor Shelley Ann Bentley commented on the budget, sharing thanks for the “time and dedication” put forth by staff to ensure the budget supports “responsible growth in our communities” and focuses on “sustaining the high-quality levels of service our residents value.”
She continued, “The budget was developed with careful strategic foresight and identifies key challenges that we must plan for proactively to maintain our strong financial position over the long term.”
The final annual budget for 2023, the Tax-Supported Operating Budget, will be unveiled on March 2.
To view the capital budget in its entirety, visit Haldimand County’s website and follow the links to the meeting’s agenda through their ‘Government’ tab.
