As we reported in the December 2013 Township Watch, four special meetings were held in January to discuss the 2014 budget. A draft budget was presented at each meeting for discussion, starting with version 4 for the January 10 meeting. In the discussion below, a summary of the budget presented to the meeting is included..
In the following tables, the
|Budget Version No 4|
|Tax Levy Requirement||$8,438,989|
|% Levy Requirement Change||2.9%|
|Tax Rate Implication (changes in assessment factored in)||1.7%|
|Reduction in Reserves||$447,580|
This meeting discussed version 4 of the budget. Both the operating and capital budgets were reviewed section by section. There are many fixed costs, such as wages and benefits, utilities, building, maintenance and elections. These are the day to day expenses necessary for Township business and are not easy to reduce. Other items are more discretionary, and under control of Council. In the Operating Budget, this might include legal and consulting fees, grants to organizations, etc. In the Capital Budget, this could include deferring purchase of a generator, eliminating a new flag pole, etc.
In his comments, Township Treasurer, Stephen Rettie, stated that this council has not been replenishing reserves at the rate that they have been spending them and that it is essential to start to reverse this.
Finance Chair Furniss expressed a serious concern as “eating into reserves this term of council is becoming acute”.
During discussions, it became apparent in the Capital Budget review that monies necessary for infrastructure repairs were not available. According to the Director of Public Works there are bridges and culverts throughout the Township that need to be repaired.
This meeting used version 5 of the budget as a basis for discussion.
|Budget Version No 5||Change from Version 4|
|Tax Levy Requirement||$8,399,539||Down $39,450|
|% Levy Requirement Change||2.5%||Down 0.4%|
|Tax Rate Implication||1.3%||Down 0.4%|
|Capital Budget||$2,880,250||Up $19,500|
|Reduction in Reserves||$447,080||Down $500|
One of the major items discussed was the identified need for infrastructure repairs (e.g. bridges) previously identified. Several alternatives were presented to address the costs of upgrading the infrastructure shortfall:
Alternative 1 – Debenture (20 year at 4%):
Alternative 2 – Phase-In with capital deferrals and levy / reserve impact:
At the public budget meeting held at 7 PM on Tuesday, January 21st “Version 5” of the budget was circulated and the following issues were raised:
Version 6 of the budget was the basis for discussion at this meeting.
|Budget Version No 6||Change from Version 5|
|Tax Levy Requirement||$8,668,284||Up $268,745|
|% Levy Requirement Change||5.7%||Up 3.2%|
|Tax Rate Implication||4.5%||Up 3.2%|
|Capital Budget||$3,190.250||Up $310,000|
|Reduction in Reserves||$624,580||Up $177,500|
The meeting was scheduled to start at 8:30 am, with a `Closed Session` scheduled at the start to address `personal matters about identifiable individuals, including municipal or local board employees`. The closed session meeting did not finish until almost 11:00 AM. At this time, members of the public who had waited almost two hours were invited into the meeting, and discussion returned to the budget, the advertised purpose of the meeting. That discussion (including a short lunch break) finally ended at around 4:30 pm (almost five hours).
There was much debate, and many suggestions for deletions and additions to both budgets. Requests were made of several departments to see if they could raise their no-tax revenues, cuts to fire department education and the heritage committee were requested, a grant to Muskoka Algonquin Healthcare was removed, and an increase to the Planning department legal budget was sought. On the Capital side, the new flag pole is out, as are some planned purchases for the library and fire department, and the deferral of the purchase of a new backhoe.
Councillor Furniss repeated his concern that this Council has taken more than $1,000,000 from the reserves since taking office (actually $1,240,000). He stated that this may turn out to be this Council`s `legacy`.
After a number of meetings starting late last year, the "final" version of the budget was tabled for approval at the Valentine's Day meeting of the Council. The MRA had many concerns about the budget presented at the last Committee of the Whole which projected a 5.7% change on the tax levy, and a further depletion of the reserves by over $600,000. Council and staff have obviously had the same concerns, and the budget presented for approval included cuts in both operating and capital expenses, and increases in "non-tax" revenues (e.g. user fees, etc.). If this budget is passed as is, the Treasurer calculates that township taxpayers will see an increase of $1,58 per $100,000 of 2013 property assessment
|Budget - for Approval||Change from Version 6|
|Tax Levy Requirement||$8,401,394||Down $266,890|
|% Levy Requirement Change||2.5%||Down 3.2%|
|Tax Rate Implication||1.6%||Down 2.9%|
|Capital Budget||$2,643,750||Down $546,500|
|Reduction in Reserves||$243,180||Better by $381,400|
Early reports from the Council meeting suggest that this budget was approved with several changes. $3,000 was added back to the grant to the Chamber of Commerce, up to $9,000 was added back to the grant to the South Muskoka Hospital depending on donations by Muskoka residents, and a further $10,000 transfer to reserves. A quick calculation put the tax levy change at 2.75%. These will be confirmed once the approved version of the budget is published.
As of the final version of the budget, the MRA notes that when this Council took office in late 2010, the reserves stood at $6,082,702. As this Council’s term finishes at the end of 2014, our reserves are forecasted to be $5,105,320 or $977,382 less – this is approximately 16% less than when they came to office.
In reviewing the budgets, we note that there are several areas of concern for spending in the past year (2013), including:
The MRA will continue to look over the approved version of the budget when available and make further comment at that time.
Finally, it should be noted that the Township portion of our property tax is normally about 15% of our total tax bill. The District normally accounts for about half, and education makes up the rest. The Distract budget is going to District Council on February 18 for approval, and currently looks like a 1.8% increase (compared to the 2.75% increase at the township level)..
Happy Valentine’s Day
TML - Committe of Adjustment
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