Norfolk’s marinas stay public, keep revenue

By Jacob Fehr

 

Norfolk councillors voted to end the county’s practice of subsidizing its tax levy with surplus funds generated by Norfolk’s public marinas in Port Rowan and Port Dover. Surplus revenue will now go to the county’s marinas reserve fund with the goal of making the facilities financially self-sustaining.

The marinas’ finances have been in and out of Norfolk’s news cycle for months.

On September 10, 2024, county staff presented a report to council prepared by corporate initiatives manager Stephanie Potter that recommended selling both facilities.

Ms. Potter’s report forecast $21.1-million in capital costs for the county to maintain the marinas over the next 10 years. Although Port Dover Harbour Marina generates surplus revenues annually, Port Rowan Harbour Marina does not, and the projected expenses could not be covered by the marinas’ net revenues or reserve fund over that time. Given those projected costs, the tightness of Norfolk’s finances, and the fact that marinas are not a service the municipality must provide, the report recommended selling the facilities.

 

Public pushed back

Council postponed a decision until its council-in-committee meeting on October 9 to allow for public engagement and for staff to acquire more information.

The public pushed back against the suggestion to sell the marina sites. Council received letters and deputations and saw a significant turnout at a public meeting on the marinas held at Vittoria & District Community Centre on September 25. Though some supported selling the assets, most respondents disapproved, with many condemning the idea.

At the public meeting, marina proponents advocated for keeping the facilities. Many took issue with the projected expenses for the marinas, pointing out that not all costs were necessary. Some recommended raising user fees to make them more sustainable. Others called for developing new means of revenue generation for the marinas. A few expressed that the marinas are irreplaceable and ought to be treated as such.

One idea that emerged at the meeting was that there would be enough money in the marinas reserve to maintain them if the county hadn’t been subsidizing its tax levy with surplus revenues generated by the facilities.

 

Surplus subsidizing the tax levy

Council heard the message loud and clear and voted to keep the marinas in public ownership in October. As part of that decision, council directed staff to find ways to reduce projected capital costs for maintaining the marinas.

Subsequently, according to a report prepared by senior financial analyst Ryan Fess presented to council on December 10, the county’s estimated cost to maintain the marinas for the next 10 years has decreased to $14.7-million. Mr. Fess’ report also stated “that current user fee rates are insufficient to support future obligations, warranting more immediate action to avoid increasing the infrastructure funding gap.”

 

Rate hikes of 25%

Heeding staff’s recommendation, council voted at that meeting to increase the marinas’ user fees by 25 per cent in 2025, as well as to direct surplus revenue generated by those increased fees to the marinas reserve to help pay for future capital costs.

“Although this represents a substantial increase for current marina users, rates remain at or below surrounding private comparator rates,” Mr. Fess’ report said.

However, the report indicated that one price hike wouldn’t be enough to make the marinas financially sustainable.

“Based on the adjustments made to the 10-year capital plan, preliminary estimates suggest that subsequent annual user fee increases of 25 per cent would be necessary until 2028 in order to support the $8-million in capital projects scheduled in 2029. Thereafter, minimal 2.5 per cent inflationary increases would be sufficient to maintain an adequate reserve balance to the end of the period.”

Council’s decision to raise the rates by 25 per cent in 2025 ruffled some residents’ feathers, many of whom were especially concerned about additional increases to come.

At the budget meeting on Jan. 15, Port Dover Waterfront Preservation Association director Margaret Creighton made a deputation to council asking for the county to stop subsidizing the tax levy with the marinas’ surplus revenues. She said continuing to do so “[would] be the final nail in the coffin” for Port Dover’s marina.

“What other recreational facility in Norfolk County has made a profit and is required to contribute a portion of these profits to offset the tax levy, even for one year?” Ms. Creighton said.

She pointed out that over $5-million in marina surplus revenues has been redirected to offset the tax levy since 2005, resulting in the reserve being “underfunded.”

“Let’s not continue making this mistake. Let’s invest in the outdoor recreational facility and maintain the marina as a financially sustainable entity, as it always has been. Let’s use its profits to enhance this waterfront property so that it can provide a wider variety of waterfront related recreational activities to all taxpayers,” she said.

 

Vote 8–1

After discussing the marina tax levy offset, council voted 8–1 to end the practice. Ward 6 Councillor Adam Veri put forth the motion, which was seconded by Ward 1 Coun. Tom Masschaele.

“The bottom line here is that we are raising fees and passing along some of those costs to the boaters, and I feel like we should be making sure that the money the marina does generate is returned to make sure that we can pay for those extensive capital costs in the future. We’re looking at about $14-million last time we heard. We are not going to be able to generate enough revenue, I don’t think, without diverting the surplus to the reserves to ever make $14-million, so I feel like if we’re going to be serious about making the marinas work, then we have to do this,” Coun. Veri said.

Coun. Masschaele echoed his peer’s sentiment about the marinas.

The lone dissenter at the table was Ward 4 Coun. Chris Van Paassen. He suggested it may be worth deducting the approximate value of what one would pay the county for property tax on the marinas if they were privately owned from their annual surplus revenues.

Responding to the suggestion, Coun. Veri said he was more interested in what is than ifs.

“I’m looking at what is, and it’s a mess, and here’s an opportunity to get out of that mess faster,” he said.

Coun. Van Paassen also expressed concern that taxpayers’ money would be used to keep the marinas afloat moving forward.

 

Self-sustainable

CAO Al Meneses said that following council’s direction to keep the marinas in October, “part of what staff are coming back with are some recommendations on an operating model that will hopefully make the marinas self-sustainable and not require a subsidization from the tax levy.”

Speaking after council’s decision, Coun. Veri expressed optimism about the future of the marinas and relief to be moving forward on the issue.

“Glad the surplus decision is behind us and we can move on to the next step, which is getting that capital forecast under control and finding new sources of revenue that will help us pick away at that,” he said.

He emphasized it’s not that all the problems with the marinas are resolved, but “we’ve agreed on steps to resolve the challenges we’re facing.”

 

Originally printed in The Good News, February 2025.