Most Cost-Savings Needed for Northumberland County to Meet Levy Increase Target for 2026 Budget

Pete Fisher
5 hours ago
• Categories: City Hall, Local

More than $2.4 million more in reductions are needed for Northumberland County council to meet its target of a five per cent increase to the tax levy in the 2026 budget.

That’s after nearly $8 million in already proposed adjustments and savings, should they all be approved, in a report on the County budget presented to council by Director of Finance/Treasurer Matthew Nitsch during a special meeting Friday morning.

Nitsch said “2026 is challenging from a budget perspective, mostly caused by the additional payment for the GPL debenture,” referring to the new Golden Plough Lodge. “So that payment is an extra $3.6 million. It represents a four-and-a-half per cent increase on the levy, just that alone, so when we’re talking about a target of five, that leaves .5 of a per cent (for increases) for the rest of County operations and capital programs.”

Nitsch showed an original new levy increase for 2026 that would come in at 13.88 per cent, adjusted to 12.30 per cent after factoring in 1.58 per cent growth.

Additions and other adjustments increased the proposed hike to 18.11 per cent. The ongoing items adopted during the 2025 budget process are: Public Works Issue Paper – Fire Radio System ($109,000) and Security System Improvements ($945,000), 310 Division Shelter On-site Security ($400,000) and ECE Bylaw Compliance Costs ($587,700), Salaries and Benefits ($410,000), GPLNCAM Debenture – change to 20-year term ($768,352) and the Art Gallery of Northumberland ($100,000).

Regarding the GPLNCAM debenture, Nitsch said it’s the change council made from a 25-year term to 20 for the loan.

“That saves us roughly 14 or 15 million dollars in interest over the life of the loan, but it means each individual payment is higher so we have to adjust for that.”

New adjustments are: Paramedic Defibrillator – internal debt payback ($102,000), Business Analytics Manager – to be proposed ($130,000), Physician Recruitment ($263,000), Treatment Beds ($241,029) and Group Benefits – renewal projection ($579,305).

Nitsch spoke how potential adjustments and savings, to be decided by council, in the amount of $7,985,597 could reduce the levy increased by 10.01 per cent down to 8.10.

That includes a one-time draw of $2-million from the rate stabilization reserve (2024 surplus funds).

“There is more available in the reserve, but the consequence of using money from reserves to lower the levy is that it’s really a band-aid solution,” Nitsch said. “It pushes the problem into the next year because these debt payments are ongoing.”

Savings could also be found in postponing increases of $1,558,800 for both the dedicated infrastructure and housing levy increases.

“There are consequences to doing that – we will have less in those reserves,” Nitsch said. “Not having those increases has an impact. Nonetheless, we could save four per cent, keeping those contributions to reserves at the current levels.”

Among the list items potentially saving money in 2026 was a $1,100,253 price tag for the 473 Ontario Street Cobourg debenture payments as the levy requirement shifts due to an updated schedule.

Nitsch said if everything is approved, then the levy increase goes down to 8.10 per cent. Another $2,473,570 in savings is still required to get down to the target five per cent levy increase.

“Plus we’d have to agree to all of the items you’ve noted,” said Warden Brian Ostander.

“Exactly, yes,” Nitsch responded.

“So, in truth, we need to find eight million dollars somewhere, either through your recommendations or somewhere else,” Ostrander said.

Councillor Lucas Cleveland, the mayor of Cobourg, wondered what the impact would be “if council made the radical, not that I’m suggesting we do” to eliminate for just one year the cost of $6,420,588, or eight per cent on the levy, for pavement rehabilitation and maintenance.

“What does that do to operations within the County for one year? Does that basically stall all the equipment and leave workers with no job to do or will there be other work and then this could be picked up the following year when we don’t have that five per cent increase on the GPL?”

Director of Public Works Denise Marshall said deferring the capital program would mean work for 2026 wouldn’t be completed, some design and environment assessment work wouldn’t move ahead and neither would pavement preservation when roads are identified.

That money would also need to be worked back into the budget the following and subsequent years.

“With the cost of escalation, it’s actually more in future years. We’re also not meeting what we’ve outlined in our Asset Management Plan as far as work that we’re going to be doing each year,” Marshall said. “This also rolls over into our maintenance and operations side of things where these roads where they’re deteriorating require additional maintenance and operation from a time and material perspective as well since we still have to meet minimum maintenance standards.”

Cleveland assured Director Marshall he wasn’t suggesting giving up all projects on roads, but said he was echoing a previous statement from Nitsch suggesting to find the least service reduction to find the needed dollars to bring down the levy.

“Not that there’s ever going to be a place where we’re all celebrating a reduction in services, it’s about the reduction in services or the cancellation or the postponement in services that this council can tolerate at this moment in time, acknowledging that no matter what decision we make, it’s going to have negative consequences.”

Cleveland said his ask of staff is what level of service can be reduced, not for a one-year period but over several years that council members will then need to communicate to constituents.

“None of this is palatable, but we still need to make a decision so in that stream I’m looking for what level of service whether it’s the roads, whether it’s the downloading of different permitting, whether its procurement, whatever makes sense from this level in terms of a service standard to reduce that we can actually hold for three years to see these savings year-over-year,” he said.

CAO Jennifer Moore said services identified in the report that have discretion are ones that don’t have a legal obligation through another level of government, such as meeting a certain standard or threshold from the province, for example.

“What’s listed in this report is where we can decide that we would like to locally offer less service than what we have historically and some of those are both internal and external and they do have ripple effects,” Moore said. “That’s what we’re hoping to get today is some direction from council of where they would like us to dig deeper into some of the services and areas where it would be most palatable for us to come back with additional information.”

Cleveland also suggested there hasn’t been enough attention paid to the new growth estimate.

“The fastest way to make sure your numbers are in the black and not the red is to make sure your revenue goes up and what I’m seeing is a staggered and small growth number at 1.58 across the County and I think a lot of these conversations can be avoided if we as lower-tier member municipalities continue to focus on building those houses and continuing that growth model. If all municipalities are striving for four and five per cent growth numbers then these conversations get a lot easier.”

Councillor Mandy Martin, the mayor of Cramahe Township, said Cleveland was raising good points and said Cramahe opted out of the County’s road surface treatment program “because we found we could get it cheaper, much cheaper than the County rate. It was an innovative proposal and I know we’re very tiny, but man it made a difference on our tiny budget as compared to the County.”

Martin mentioned seeing roads that have started to deteriorate in short order after resurfacing and said perhaps other materials could be considered.

“If your road is not constructed properly with proper ditching and drainage, what is the point of doing a million dollar resurface with asphalt if in next spring your edges are already deteriorated,” she said, adding “but it’s this holistic approach that we need to do. The other thing is the kind of gravel that you use on a road. These are very, very specific things…but man it saves money in the long run. Do we need to asphalt? Should we be using tar and gravel, tar and stone? It was this kind of review that I really appreciate in my own municipality when I really started listening to my operations people.”

Councillor Olena Hankivsky, mayor of Port Hope, joined the meeting electronically with the approval of council and suggested there needs to be a real paradigm shift in thinking and approach to what kind of services and at what level for those that are discretionary.

“I think we have to be brave and courageous around this because I think about any households in our community where they have a certain budget and that’s all they can spend and they can’t spend a dollar more,” Hankivsky said. “We have to take that same sensibility, that same approach to how we’re dealing with all of the competing demands that we have.”

Ostrander believes local governments need to be more innovative when it comes to revenue generation. He said his municipality of Brighton has started automated speed enforcement with the purpose to slow drivers down, but it’s also expected to generate significant revenue.

“I would offer to all the member municipalities around the table at the County that Brighton is set up to help with that. If you would like to engage in that, we’re prepared to partner.”

Ostrander also wondered about the addition of parking fees where there currently aren’t any such as the Northumberland Forest, for example.

“I agree with everyone who has spoken, that we need to dig deep, figure out where these opportunities exist both for savings and revenue generation and then come back to council with more of that information,” he said.

Hankivsky said she would like to see more exploration of public-private partnership possibilities.
Nitsch noted the financial numbers in the report provided are high-level cost estimates and staff can research further to attempt to reduce those numbers.

Cleveland agreed with Martin’s earlier point that lower-tier governments have an ability to find innovative solutions.

“If County staff think that there’s something they want to push back to the lower tiers to reduce this budget because there’s an opportunity…I would like those included as well and I’d like to hear from County staff if they believe that we should take something back because we can do it, to Councillor Martin’s point, better.”

Councillor Scott Jibb, mayor of Hamilton Township, suggested shifting the cost of a service to a lower-tier government wouldn’t necessarily result in a cost-savings for taxpayers.

“I don’t think any of us would disagree Councillor Jibb, but what we did hear was that sometimes lower tiers are more granular in their review of their budget at the council level and often are able to find savings at a local level that perhaps we’re less able to do at a larger level of government,” Ostrander said.

More discussion is expected at the finance and audit committee meeting in September.

County council passed a motion Friday to direct staff to review all non-mandatory services and provide options for service delivery as well as limitations of reducing; explore innovative revenue generating opportunities including public-private partnerships; explore options for services that could be downloaded to Northumberland’s seven member municipalities; explore the financial impact of increasing interest revenue in the 2026 budget; and bring forward a report with the requested information to a special meeting of County council in September for council’s consideration.