Lambton County is looking to up spending to $240 million in 2021, but most of the $19-million increase over last year should be covered by grants, reserves, user fees and other revenue sources.
The county’s draft budget, presented to county council this week, calls for an extra $2 million from taxes for $82 million total.
That projected 2.57 per cent levy increase shrinks to 1.75 per cent when assessment growth is factored in, county treasurer Larry Palarchio said.
“Which I just want to point out is the lowest draft levy increase that we’ve submitted to the county council in the last seven years,” he said.
Council weighs the budget starting March 3.
The key to the relatively low levy increase has been federal and provincial support, he said.
Grants related to COVID-19 and costs savings from service reductions and staff reallocations amid the pandemic amount to about $12.5 million, Palarchio said, noting those are basically offset by increased spending via public health, social services, long-term care and other areas because of the pandemic.
“In the end, the impact on the levy is zero,” he said.
For 2022’s budget, the county may not be as lucky, he said, cautioning any additional grant money to come in 2021 would likely have restrictions attached.
“The real challenge could be a year from now when the feds and the province tighten their belts,” Warden Kevin Marriott said, adding “The millions we got for COVID, I don’t know what we would have done without that.
“A year from now, I’m almost sure we won’t have any of that left.”
More provincial downloading for things such as public health cost sharing are also expected before 2022’s budget, Palarchio said.
“We haven’t felt the brunt of it in 2021, but we’re anticipating some potential challenges in 2022 on the provincial funding side,” he said
Hopes are to see more assessment growth in coming years as various municipalities in Lambton see more building, he said, calling the 0.82 per cent, or $657,000, assessment growth increase “fairly high.”
The county’s debt stands at $19.8 million and is low compared to a borrowing cap of more than $90 million, he said
“Interest rates are low right now, so if there was an opportunity – if the county council wanted to look at a major project of some sort – it’s an opportune time to borrow,” he said.
Reserves at the end of 2020 were $60.8 million, up more than $12 million over 12 months and mostly due to deferring capital work and Safe Restart funding from the federal and provincial governments, he said.
Commitments to draw on reserves in 2021 mean the accounts will be back down to an estimated $48.5 million by the end of the year, he said, meaning they’re relatively stable.
“To be open and transparent, we’re well below the median in other municipalities,” he said. “We are growing (reserves), which is a good thing, but we’d like to grow them in a more sufficient level in order to be dealing with our asset management plan.”
Costs on servicing the debt in 2021 are $3 million.
The draft budget also includes $5.5 million towards the county’s asset management plan to deal with infrastructure upkeep, and $500,000 to start a fund to eventually buy the space its leasing in the Bayside Centre in about 10 years.
Total capital spending for 2021 in the draft is $36.4 million, up from $31 million in 2020.