By Sylene Argent, Local Journalism Initiative Reporter, Essex Free Press
Essex County Council received a report detailing the proposed 20-year Roadway Expansion Plan Funding Model as information at the September 4 meeting.
This document will offer the County information to make informed decisions about County roadway development, Melissa Ryan, Director of Financial Services/Treasurer, told County Council.
“This funding model has been designed with simplicity and adaptability in mind. Administration has structured it to balance the use of levy funds, debt financing, and reserves to cover the projected $641.2M total cost of the program over the next two decades,” she explained.
The funding model will change frequently – likely getting updated biannually – as new data becomes available, economic conditions change, needs shift, and additional funding sources become available, Ryan added.
Currently, the County levy contributes just under $18M per year for roadway expansion. That is leaving a significant funding gap.
“To address this, the model proposes increasing the annual levy contribution by $1.5M each year. We need to exceed $40M by 2040,” Ryan said, adding this will be added to the proposed 2025 County Budget for Council consideration starting in November.
This steady increase, she added, will help make financial commitments without overburdening the annual budget.
“As the region continues to grow, it is essential to prevent stagnation in infrastructure development. Without secured provincial and federal funding, the County must develop a long-term financial strategy to support the necessary expansion of our road network,” Ryan wrote in her Report to County Council.
“While the County has historically maintained low or no debt, it will be important to incorporate diverse funding sources to ensure our road network expands in step with our community’s growth.”
In addition to the levy increase, this model also incorporates debt financing and reserve funds.
Administration has earmarked the County would need a series of loans totalling $180M spread out between 2027 and 2037.“This will allow the County to finance critical infrastructure projects without over extending our debt capacity,” Ryan explained, adding the use of reserve funds is a key component of the plan.
“While the reserves will be utilized to support expansion projects, there is a strategy to rebuild these reserves starting in 2038, which will provide a financial cushion for future needs.
”The County is currently exploring additional funding sources, such as potential Development Charges revenue.
The County is currently working to create a Development Charges (DC) background study with a consultant. If County Council approves those recommendations, that could provide another revenue stream to further alleviate the pressure on the tax rates and debt.
Back in May, County Council approved funding a Development Charges Study by utilizing up to a max of $60,000 from the Rate Stabilization Reserve.
Development Charges govern the collection of funds to ensure infrastructure costs created through increasing population and employment are fully funded by new development that benefits from the introduction of new services through a user-pay approach.
The Development Charges background study would forecast of the amount, type, and location of future development; average services levels provided by the County over the 15-years; capital cost calculations for each of the eligible development charge related services; an examination of the long-term capital and operating costs for infrastructure required to service the forecasted development; and the Asset Management Plan to demonstrate that all assets included in the study are financially sustainable over the full life cycle, a previous Report to County Council highlighted.
It will also assess County-wide services, including library, land ambulance, long-term care, roads, and waste diversion.
If provincial or federal funding becomes available, Ryan said the Roadway Expansion Plan will be adjusted accordingly.
Essex Mayor Sherry Bondy would like to see the County create a list of topics for the Association of Municipalities of Ontario (AMO), as County reps meet with provincial ministers at its annual conference, noting the County is growing. It could approach to see if funding is available for expansion programs.
County CAO Sandra Zwiers noted that could be added to possible conversations at AMO.
“One thing that – when we were referencing our recent delegation to our local MPPs – we were criticized for was the County’s lack of Development Charges,” Zwiers said. “We do have a tool in the tool kit that we have never used, that we are in the process of working to expand. But, that growth has a cost and DCs are meant to cover the growth.”
Zwiers agrees with keeping the irons in the fire at the provincial, and possibly the federal level, for things happening in the region because of growth, she believes the County should explore all revenue options first.
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