An unanticipated 11 percent hike to the Ontario Provincial Police (OPP) budget had Councillors siphoning off reserve funds to cover the funding gap last week.

December’s budget deliberations shaved down a forecasted 11 percent tax increase by cutting and redistributing capital budgets and maintaining status quo services. Over the course of a week, Council reduced the net increase to 3.6 percent. 

But staff and Council did not yet know the required OPP budget increase. Ontario Solicitor General Michael Kerzner announced in late December that Police budget increases would be capped at 11 percent, while staff had estimated 6 percent, in line with regular annual increases of about 5 percent.

“Every municipality in Ontario got the 11 percent surprise,” Mayor Steve Ferguson noted.

The news arrived on the evening of December 5th, just after budget talks wrapped. The additional $390,500 required for the OPP budget brought the municipality’s projected tax increase up to 4.35 percent. 

Savings of $18,025 from a smaller-than-anticipated Quinte Conservation budget request were not enough to make up the difference. 

Council carried a motion brought forward by Councillor Brad Nieman to fund the increase by drawing from three different reserves: $143,500 from the Climate reserve, $150,000 from the Municipal Accommodation Tax (MAT) reserve, and $97,000 from the Waste Diversion reserve.

Councillor Nieman’s proposal to draw on these particular reserves came out of consultation with staff about the best way to make up the shortfall.

“Naturally, we would think of a tax stabilization reserve, but ours, where it should be in the realm of millions of dollars, is almost empty,” said Interim CAO Adam Goheen. 

The dissolution of the South Hastings Waste Services Board transferred $312,574 to the Waste Diversion reserve fund. After reallocating some of those funds to the OPP budget, about two thirds of the reserve remains. 

Although the MAT reserve replenishes every year based on tourism levels, Director of Finance Arryn McNichol noted that the transfer, “would in effect deplete it to zero.” Likewise, he added, the Climate reserve was also emptied. 

“We started that fund in 2017 because the roads got washed out,” recalled Councillor Nieman. 

Council generally accepted the solution, with some trepidation about dipping into reserves. Councillor Chris Braney paused over the Climate reserve. “Who knows what will happen?” he wondered. 

“I would never want to see this become a precedent,” Councillor Phil St-Jean agreed. “I believe that as a stop gap measure, though, this is the right thing to do.”

Councillor Kate MacNaughton drew a harder line on her opposition to using the reserve funds and did not support the motion. “When we do hit hard times, these are places we can potentially return to,” she said. “I don’t think this is a wise venture.”

The budget carried with the amending clause to transfer the reserve funds, keeping the net levy at 3.56.

“This strikes me as a reasonable compromise to deal with something that arose at the 11th hour,” said Mayor Ferguson.