The Poor Cousin & The Rich Cousin

Jeff Green | Jan 25, 2023

A quick scan of the numbers in the proposed South Frontenac capital budget reveals that staff are proposing to spend about $11 million this year on capital expenditures, including over $8 million on road projects.

The biggest ticket item, by far, is the Sunbury Road reconstruction project at $3.8 million. As Wilma Kenny reports this week (page10), the engineering for an upgrade to that road, which is a designated detour off the 401, was done in 2020 on the expectation/hope that provincial grant money was forthcoming for the project. That grant money did not arrive, so the Public Works department, with support from the Chief Administrative Officer, is proposing that the township take it on themselves.

The staff prepared draft capital budget has not been addressed, no less approved, by council, so it may change. But it is based on some long range planning that previous councils have approved and $8 million on roads and bridges is in line with previous years. As well, almost 40% of the cost of this budget will be covered by reserve funds, and only 26% will come from 2023 taxation. Those reserves will need to be replenished with property tax dollars, but capital reserves act as a buffer against external financial pressures on the township caused by things like runaway inflation, as we have seen this year.

Because the township is in a strong position as far as reserves go, it can lower the contribution to reserves in a given year if necessary, and make up for it when budget pressure eases.

Central Frontenac Council met last week to vet their own capital budget, as I reported this week on page 1, and two things stood out.

The first is that Mayor Smith is going into what she has indicated will likely be her final term in office, with a lot of energy. She imposed her will on the capital budget process before and during the meeting, and her intention is to minimize tax increases and avoid further debt.

The second, and this is where the comparison with South Frontenac comes in, Central Frontenac is the poor cousin in the Frontenac County family, and the gap between rich and poor only widens every year. While its reserves are in reasonable shape, its debt load is stretched to the limit, and any projects that are approved in a given year are either supported by grants, or they are paid for through taxation, requiring tax increases.

There is no mystery as to why these two neighbouring townships are in such a different place financially. This has been well documented over the years. South Frontenac has about 50% more travelled roads than does Central Frontenac, but well over 300% (3 times) the amount property assessment.

Roads, bridges and culverts are by far the largest item in municipal budgets. With so much less or a tax base, there is no way that Central Frontenac can keep its roads at the same level of repair as South Frontenac without charging higher taxes to its property owners than South Frontenac does to theirs

And they do, 33% more, but as this year's budget process illustrates once again, they still struggle to maintain an acceptable level of service. Maintaining and improving roads is a priority for every rural municipality. In our economy, roads are everything. They get local residents to work, and they are the way tourists, and residents alike, access our local businesses.

The analogy that Frances Smith used during the Central Frontenac Capital budget meeting to illustrate where the township is financially is a good one. She compared the township to a homeowner. Townships are made up of homeowners after all.

Let me use another to illustrate how expensive it is to be poor.

Over 30 years ago, when my wife and I bought our home in what is now Central Frontenac, we were stretched financially.

So much so that we jumped at an offer to rent a water heater for about $20 a month because a new heater cost over $300. It did not take a lot of advanced math to realise, as we did at the time, that this was not a good financial decision. Water heaters generally last 10 or more years, 5 in the worst-case scenario, and it only took 21/2 years for us to have paid the original $300 and we had to keep paying $25 a month (the rental went up) for years and years and years.

So why did we rent that water heater? We did not have $300 available to buy one, and we had no credit at all. And we wanted to have hot and cold running water. So, we did what we had to do, and it took many years to finally get out of that contract.

This is exactly what Central Frontenac is now facing when it comes to one of its road projects; the Westport Road rebuild.

They know it will cost more over a 15-year time frame to rebuild that road using surface treatment, than it would to pave it with asphalt, but they have neither the money on hand, nor the credit they need, to do it the right, and ultimately cheaper, way.

The gap between the financial position in Central and South Frontenac is widening as South Frontenac’s financial picture continues to improve, and this is a problem for both municipalities. Residential development is the engine of the local economy in both townships, and people are drawn to the region for its natural features, regardless of municipal boundaries. They should end up with the same level of service anywhere in Frontenac County at a similar cost, but they don’t.

So, it is time to look at a new municipal arrangement in Frontenac County.

Frontenac County politicians disagree about a lot of things, but they all agree they do not like the idea of amalgamating municipalities.

If formal amalgamation is off the table, fine, but something needs to be on the table sooner than later.

I am told that in 1997, when amalgamation was being forced on all rural municipalities in Ontario, no one knew what Bedford Township should do.

When it became part of South Frontenac, it was the poor cousin in that arrangement, and it took years before it had the same level of service as the rest of the township. In fact, during last fall's election, Bedford residents were still complaining about a lack of service compared to what residents in the more populated parts of the township receive.

But the roads and waste service in Bedford are demonstrably better than the roads and waste service in Central Frontenac.

And for the rest of the residents of South Frontenac, the property assessment from Bobs Lake, and other lakes in Bedford, has certainly made up for the cost of bringing the services in Bedford up to the standard of the other three districts.

All in all, it has been a win-win.

Central Frontenac is a great place to live, and the township road crews and office staff do what they can, but the under-resourced township finances are not getting any better over time.

Something needs to give.