Consultants offer council a ‘sobering’ look at future financial needs

Forecasts by consultants suggest Fort Erie residents should expect an average yearly levy increase of 5.5 per cent over the next decade, along with more than $350 million in “strategic debt financing” over the next 20 years in order to keep town-owned assets in fair condition.

While the numbers are substantial, they represent the best course of action in the view of Andrew Mirabella, from Hemson Consulting. And while the 5.5 per cent yearly increase would be over the 4.5 per cent the town averaged over the previous decade, the impact to homeowners would be offset by assessment growth as new taxpayers come online. That’s equated to an average of two per cent in recent years.

Previous studies have identified the financial requirements to maintain the $2.2 billion replacement value of town-owned assets. The total infrastructure gap for the town in 2025 was $33.3 million, including $8 million for rate-supported water and waste water infrastructure, and the remaining $25.3 million for tax-supported infrastructure.

To close that gap, consultants are recommending a 1.5 per cent infrastructure levy be included in the budget each year.

“The levy increases do need to increase beyond what you have been doing in order to meet our long term capital investment requirements,” said Mirabella, adding their estimates are largely focused on the capital side, and economic changes could alter the landscape from an operating cost perspective.

For water bills, the consultants said residents could expect annual increases of 5.9 per cent a year over 20 years to maintain the system, though no debt would be required.

Just under $355 million in debt financing is envisioned over the next 20 years, which will help fund projects that can’t be supported through reserves. While it’s a large number, Fort Erie would stay well within established borrowing guidelines.

“This keeps debt servicing below 12.5 per cent of own-source revenue, well within municipal benchmarks and the provincial 25 per cent limit,” a staff report said.

Still, Mayor Wayne Redekop said the consultant’s report shows just how significant the capital needs are in Fort Erie.

“This is a pretty sobering report,” he said.

One of the challenges municipalities like Fort Erie face is the fact it’s a large geographic area, meaning roads, pipes and other infrastructure must travel many kilometres to meet the needs of residents.

He called for a mix of internal restraint and provincial support to help towns and cities manage their capital needs.

“I think we need to, as we go forward, support any initiative that tries to get the province to create a new financial deal with municipalities,” he said.

Fort Erie is not alone in facing extensive capital investment needs, with most municipalities in Ontario staring down similar or worse forecasts.

Redekop added that councillors “also need to look at our infrastructure and how much new infrastructure we’re creating.”

An accompanying staff report, approved by council, recommended staff incorporate the financial strategy recommendations as guidance for its preparation of the 2027 budget.

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