Written By David Gomez, Local Journalism Initiative Reporter
SOUTHWEST MIDDLESEX - Council approved two finance measures at its January 7 special meeting aimed at managing the municipality’s cash flow while responding to a growing level of unpaid property taxes.
Council unanimously passed a bylaw authorizing up to $2 million in temporary borrowing for 2026, allowing the municipality to draw on a line of credit as needed to cover expenses before tax revenues, grants, or other funds are received.
Treasurer and Manager of Finance Denice Williamson told council the bylaw is a routine annual requirement under the Municipal Act but is particularly relevant as the municipality continues to manage large capital expenditures and fluctuating cash flow.
“This is an annual thing where we enter into a temporary bylaw, and it’s based on what the municipality may need temporarily for (…) the transition between grant funding and accounts payables and just tax levy collection,” Williamson said.
Mayor Allan Mayhew asked whether the $2 million authorization was comparable to previous years. Williamson explained that last year council approved a $2.8-million borrowing bylaw and used $1.5 million, but banks are now taking a more cautious approach.
“They prefer that the municipality request exactly what they need, rather than over-request,” she said. “When I review the cash flow and the conversations that we have had with council for in-year purchases and with the bank, $2 million is about the maximum I can anticipate that we will need as a municipality.”
Councillors also adopted a new Property Tax Billing and Collection Policy, the first formal policy of its kind for the township, as staff prepare to address rising tax arrears. Williamson told council that unpaid property taxes have increased significantly over the past four years.
“In the report, I reviewed the year 2021… and there is a chart showing that unpaid tax arrears increased by 59.64%,” she said. “In 2021, our balance was $1.2 million… In 2024, it was $1.9 million, which represents 16.73%, so now we are getting a little bit over that moderate threshold.”
Provincial benchmarks consider outstanding taxes between 10 and 15% of the annual levy to be a moderate financial risk. Williamson told council that staff will be focusing on bringing the figure down, though she said it may not drop below 10% in 2026.
Deputy Mayor Mike Sholdice asked whether the arrears were largely residential or commercial. “I’m going to say it’s mostly residential,” Williamson replied, noting there are two large estates involved and only a small amount of commercial property in the tax sale process.
Councillor Mark McGill raised concerns about whether residents fully understand penalty charges. “They might not realize that they are really going to get hit for interest,” he said, referring to the 1.25% monthly penalty set by provincial law.
Williamson said staff try to explain this when working with taxpayers and may look for additional ways to communicate it.
The new policy sets out how tax bills are issued, how penalties are applied, and how arrears are recovered, including payment plans, third-party collection services, and, in some cases, tax sales. Williamson said the goal is to provide clear, consistent guidelines while improving the municipality’s ability to collect what is owed and maintain stable cash flow.
