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When is a large tax increase not a small tax increase? When you add a Fee

Storm water management does anybody know what it is and how we pay for it?

Well the Citizens of Cobourg will soon find out just how deceitful (not my words but another commenter) Council has been and the result is that a huge increase will be coming down the pipe (no pun intended).

Cobourg, until this year has always repaired and rebuilt the Storm Water System (SWM) and paid for it out of the Public Works budget. But way back when, at least six years ago the Province mandated “Asset Planning” for all of the assets of the Town. In other words the Town had to estimate the life of every piece of infrastructure that it owns and amortise replacement costs over the asset’s useful life. The asset had to be depreciated and money set aside for the eventual replacement of the asset.

Well the chickens have come to roost in a big way for SWM. A report was prepared by Watson & Associates that listed all the repairs needed and the estimated life of each asset in the inventory as well as the replacement cost and when that cost should come due. So far so good!

In the first meeting of this new Council, this year, it voted to adopt the payment schedule for 2023 as well as a ratifying a procedural move, established by the passing of two bylaws late in the dying days of the previous Council, these moves have been described as “deceitful”. This new charge will never again appear on the Town’s ledger as a Public Works item. It will be handed over to the Water Dept of the Local Utility.

The total value of our SWM assets is $70 million dollars and the annual amount of money needed to maintain them will be $1.6 million. The amount of money spent last year, money allocated in the Town’s 2022 budget was as disclosed by a commenter on the “Cobourg News” website, “The cost of stormwater management in the 2022 budget was $508,100 (about 2% of the levy). The approved 2023 stormwater charge is $1,620,726 (about 6% of the 2022 levy). So we’ll be paying about $1.1M more for stormwater in 2023 than in 2022. The total of the proposed 2023 levy plus the approved stormwater charge is about 11% more than we paid in 2022.”

HOWEVER, this money – the new “fee” will raise $1.6 million and will not be a budget item as the 2023 budget line for SWM is only increasing by 0.1%. So how does the Town get the $1.6 million it needs to pay for SWM maintenance?

In an exchange of comments on the same topic in the same thread it was stated: “Yes, the increase in stormwater fees is $1.1M or 4% of the 2022 levy. However, the approved plan is to collect $1.6M outside of the levy. The $0.5M collected in the 2022 levy will still be collected but under a different name in 2023. This means that the total tax increase is 6% of the 2022 levy. This is in addition to the 5% levy increase due to other spending increases for a total tax increase of about 11%.

This is why the manoeuvre by Town Council is described as “Deceitful”. The Town will pass a budget increase of 5% (proposed so far) and claim that it is less than inflation and “look what a good job we have done in keeping taxes low”. But the SWM ‘fee’ of $1.6 million will be off the books and collected by Lakefront as part of our water, sewer and hydro bills.

So the question is very simple! Did the previous Council understand what they were doing when they passed the Storm Water Rates bylaws (Bylaws 047-2022 and 048-2022)? ? If they did they certainly didn’t explain it very well and certainly not in a transparent way.

The bottom line here is that the new Council, and especially the new Mayor, because he has wrested the Budget away from the General Governance person, the usual budgetmaker – the Deputy Mayor (it should be noted that the DM has been the usual budgetmaker but others have done it in the past) – will have to wear the possibility of the largest tax increase in living memory of Cobourgers. 

What can we do to correct this problem:

  • Read this for a start – a letter to the Ed from Ken Strauss
  • email all members of Council and tell them you think this fee is wrong and suggest they find a way to fix it

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