The United Counties of Prescott and Russell (UCPR) will create a reserve fund and policy for helping finance infrastructure projects and other developments geared to increasing tax assessment growth among its eight municipalities. And, the warden says it will affect taxes.

On May 24, Peter Frise of Municipal Tax Equity Consultants Inc. presented various options to the eight UCPR mayors and the Chief Administrative Officers of each municipality.

Frise emphasized that the projects involving UCPR-municipal partnerships should be ones that create increased taxation capacity for local governments. He said they should be projects that enable growth, not developments themselves.

“We’re really talking about assessable improvements,” Frise said.

He reminded the mayors that tax reassessment does not create growth, but it is instead supplied by actual new taxpayers. Frise noted that the UCPR had a 3.92 per cent growth in its tax revenue in 2022 worth $2,027,269.

Frise said there is very little increased assessment on new industrial buildings. He said that due to the contents of those buildings, they have a smaller assessable value. He said that any budgeted growth should also be expected within the budget year, and not speculated for years beyond.

Frise presented four ways which the UCPR could assist its lower-tier municipalities with projects that could lead to increased assessable growth. Tax increment financing (TIF) involves an arrangement where a levying body—such as the UCPR or a municipality agrees to give up some or all of its revenue derived from new growth specific to a certain project. Forgone revenue is like TIF but is where the upper tier (UCPR) agrees to transfer future taxes that could be realized to the local municipality. This arrangement is also property specific. Direct investment/speculative recovery involves the UCPR determining it will contribute a certain amount of funds to a specific local project. The cost must be carried by taxpayers immediately because any consideration of future revenue is speculative. The creation of tax room/tax policy initiatives would involve levy reductions and a reduction of tax ratios.

Frise emphasized he was not intending to convey the message that growth is undesirable.

Russell Township Mayor Pierre Leroux said he likes the idea of direct investment where counties would give a specific amount for a project.

“The challenge is, how do you determine what to give?” he said.

Leroux acknowledged there will be an impact on residential taxation.

Hawkesbury Mayor Robert Lefebvre said he also agrees with the idea of direct investment. He also noted that increased revenue due to growth is often used by municipalities to cover inflation and increased demand for services.

“We need to help the municipalities grow; we need to attract businesses. There’s a way from growth,” remarked Warden Normand Riopel.

He said no matter which method is chosen; it will lead to tax increases.

“We’ll have to have a discussion about which route we want to go,” Riopel said.

The Warden recommended setting aside one per cent of the 2024 budget for a reserve to assist municipalities with infrastructure projects focused on increasing assessment growth.

Clarence-Rockland Mayor Mario Zanth said he wants to be sure any policy is developed thoroughly.

“I’d rather get this right the first time. I don’t want to come back in two years and have to hammer it out again,” he said.

UCPR Chief Administrative Officer (CAO) Stéphane Parisien said the administration is not supportive of the initiative.

“I’m not supporting this, but it’s a decision by council that we will live with, and we will move forward.”

However, he did concur that the idea of setting aside one per cent of the 2024 budget for direct investment on municipal partnerships made the most sense. He said it equals roughly $535,000 on the levy.

“Could we downsize what it would be on the resident?” East Hawkesbury Mayor Robert Kirby.

Treasurer Valérie Parisien said it is possible.

A resolution, moved by Zanth, and seconded by Lefebvre to establish the reserve and accompanying policy was carried unanimously.