When it comes time to repair or rebuild infrastructure such as roads and bridges, the real costs may not actually be as expected, so there are contingencies built into Woolwich’s budgets. The downside is that the budgets, and the tax increases that support them, may be higher than needs be.
Councillors wrestled with the issue during a special budget session January 17 that looked specifically at the budget for the engineering and planning services department.
For Coun. Patrick Merlihan, the contingencies built into many of the department’s line items appear to be redundant given that the township maintains contingency reserves. He argued the contingencies built into the budget often go unused, but then raise the baseline in subsequent budgets, year over year.
“We should try to budget what we need,” he said.
His concerns were echoed by Coun. Scott McMillan.
“Can we have a conversation about the merits of the double contingency?” he asked, noting there’s easily a two per cent difference across the budget.
But staff argued that wiggle room is needed to deal with variables that come up between budget forecasts and the tendering of jobs, for instance, along with the likes of problems uncovered once work has begun.
“There needs to be some recognition that things happen,” said director of finance Richard Petherick.
Jarred Puppe, acting director of engineering, said cutting too much of the wiggle room could lead to sudden increases down the line.
For 2019, engineering and planning services has a projected operating budget of $5,148,464, up 1.2 per cent from last year’s budgeted amount. Along with administrative costs such as staff salaries, the budget includes the likes of road maintenance – from plowing and grading to pavement repairs – and building inspections.
For instance, the township plans to spend $575,000 on maintenance of its asphalt roads, a budget that encompasses the likes of patching, crack sealing and line marking. It also includes a road needs study that provides an update on the state of the roads and helps set future priorities for repairs and reconstructions.
In discussing the study, councillors got an immediate look at where wiggle room is needed, as Puppe said the $40,000 in the budget was likely too low, requesting an additional $10,000 be added by finding the funds elsewhere in the department, pushing back against suggestions the study could be set aside or postponed.
“It’s a fairly inexpensive study for the importance we place on it,” he said.
Coun. Murray Martin suggested just increasing the budget to make up the difference rather than cut elsewhere.
“An extra $10,000 will not impact the taxpayer by very much.”
Martin also suggested the township look at converting more of its gravel roads to tar-and-chip or even asphalt.
“It’s a fantastic idea, but it ultimately comes down to dollars and cents,” Puppe responded, wondering where the money would come from given the existing infrastructure deficit.
One place Woolwich has found some money is in reducing its energy bills for street lights thanks to converting to LED lighting. From $237,000 in electricity costs in 2016 and then a drop to $131,000 the following year, the township is now budgeting $100,000 for 2019.
“It’s a good news story,” said Puppe, noting all of the regular street lights have been converted to LED, with decorative lighting next on the list.
Councillors meet again tonight (Thursday) to discuss the recreation and facilities services department and capital spending for 2019.