There is no 17 per cent solution for residents here.
It was a packed house in the Shamrock Room at Centre 2000 for a public information session on Dec. 12.
Though attendance was high, many of the questions came from only a dozen residents, some of whom returned to asks questions numerous times throughout the meeting.
Town manager Frank Miele thanked those who attended to hear the review of the second draft of the town’s operating and capital budgets.
Miele said not too long ago, council had discussed the first draft of the budget. At that time, the recommendation was a potential 32% increase to the local tax levy.
On Dec. 12, a second draft was presented and, as a result of council comments, staff came in with a lower amount.
Because of the timing, Miele explained, this was the first view of the revised budget by council as well.
Mayor Lou Maieron said this approach to the budget was new for Erin.
“We are trying our best to come in with a reasonable budget, yet move forward on tackling long-standing issues in the municipality,” Maieron said.
Director of Finance Sharon Marshall took the audience through the changes being proposed. Overall, she explained, this would bring the proposed tax increase from 33% down to 17.6%.
Marshall said staff was told to come back with a reduced budget. Even with changes, she said the $5.27 million to be raised through taxes is roughly $810,000 more than the 2012 levy, or a 17.6% increase over last year.
She summarized the changes, including: hiring freezes in all departments, reducing overtime in all departments by 25%, an increase in new debt from $1,637,365 to $1,927,365, maintaining current service levels, and cutting or deferring new initiatives proposed in the earlier budget draft.
Marshall said there are challenges where council has no choice but to absorb the costs. She noted that in the past, council had used any operating surplus in the current year, to offset the tax impact in the following year. Last year, council used $230,000 from the 2011 surplus to reduce the tax impact to 2012.
Next, she said, the province’s OMPF (Ontario Municipal Partnership Fund) grant for the town has been cut by 10%.
For Erin, that is a loss of $65,000 in grant revenue, which adds another 1.42% to the tax rate.
Debt servicing costs are up by $136,000, adding almost 3% to the tax rate.
Plus, the Hillsburgh fire hall cost overruns of $190,000 have added just over 4% to the rate.
She then explained that overall non-discretionary costs have increased by $646,188 – (14%) based on the assumption that a 1% tax increase is required for every $46,000 raised by the municipality.
Part of the capital increase is to improve local roads.
She said the bottom line for the roads budget is an overall increase of just over $500,000.
Marshall said the hope is to reduce overtime to generate some savings in the roads department. She estimated that based on an average $383,000 residential assessment, the current proposed impact would be a local increase of $169.92 [not including the county or education taxes].
Although the gathering was a public information session to garner input about the budget, more than a few questioners strayed from that topic, asking questions directly to council representatives.
Only Mayor Lou Maieron and councillor Barb Tocher were able to attend the meeting with the rest having other personal commitments prior to the meeting date being set.
Wellington County Councillor Ken Chapman said that he was pleased to have the public forum.
He was disappointed that the budget presented during the forum was not the one he had the figures on.
Chapman said he had concerns with the town’s planning department. He said that last year, the town spent over $136,000.
“My question is why we are spending any additional money on planning when the service is available to us at the county level.”
Chapman believed that it is up to council to make the best use of resources it is already paying for and questioned the need for the town to have a separate planning department.
He also had issues with the water system which is under pressure – but facing a decision of council to allow a number of free-hookups – resulting in a loss of over $100,000 in revenue for the water system.
He then added another decision of council to allow further free hookups might cost another $250,000 of revenue – even though $30,000 was spent on a five year plan.
“That plan has been essentially thrown out the window.”
One resident said this draft is calling for an increase of 17.5%, which he called unacceptable.
“We can’t afford these increases.” He recommended council come back with only a three or four per cent increase – since he too agreed there are some things which need to be done.
Others contended budget numbers are getting out of control. Arguments were made that surrounding areas to the south had property taxes less than Erin – without including the proposed increases.
Resident Paul Dermott asked whether staff and council believed in accountability and responsibility. He said he believed budgets should start off from a true $0-based budget – not based on a percentage increase from a previous year.
“Every single item in the budget needs to be justified – including the pencils you make the budget with.” He said that when increases exceed the rate of inflation, something is wrong.
Dermott agreed there are unexpected expenses, “but they should be few and far between.” He considered the increased budgets of various items appear to be out of control.
Dermott also questioned a proposed 39% increase to the fire budget when a new fire hall in Hillsburgh should make the department more efficient.
Fire chief Dan Callaghan said a lot of the money is to deal with the cost overruns which happened as a result of the discovery of soil contamination and the interest costs on the debt.
Dermott questioned who was the project manager of the project, and then asked why the town was not coming back on the company because of the cost overruns.
Callaghan maintained that except for the soil issues the cost overruns have been within budgeted amounts.
He explained that once the soil contamination was discovered, ongoing testing and ministry requirements incurred significant additional costs.
Dermott didn’t buy the argument.
“Did you not test the soil before construction?”
Callaghan said a qualified engineering company did soil tests, however those tests provided false readings.
Dermott countered that if that was the case, those costs should be recovered.
Callaghan said the issue arose only after construction began – which involved all the contaminated soil having to be removed.
“That is what led to the cost overruns,” she said.
Although Rod Finnie had signed on as a delegation, he commented that most of his concerns were addressed in the most recent version of the budget.
“I was concerned with the lack of capital investment. Having dealt with budgets for a number of years, it is important to keep your roads and bridges in good shape.”
Wayne Lewis was concerned that the five-year capital budget does not include the cost for water and sewage – nor the additional infrastructure costs associated with doubling the population of Erin over the next 20 years. He asked whether council has looked at addressing those costs.
Miele said the municipality Sewage Settlement Master Plan is anticipated to be finalized by February 2013.
That plan will identify the type of servicing the town will seek for existing and future development. The capital budget would be revised accordingly.
Bob Simpson also considered the cost overruns at the fire station as “unacceptable.”
He contended the companies involved were either not qualified or not doing the job properly.
“We need accountability.”
Bruce Hood had questions about the condition of the gravel roads – many of which he referred to as “dirt roads.” He wanted to know where the money was spent on roads last year.
“I think whoever is responsible should be embarrassed with the road conditions.”
He pointed to various road closures in the past year and current condition of roads as an example of the lack of maintenance.
“I am embarrassed at the condition of my road.”
Hood was not certain why the roads are in this state. He suggested if cost is the issue, the municipality could take on addressing trouble spots rather than entire lengths of road.
Hood said if over 50% of the tax bill is paid to Wellington County, perhaps it should take over the roads as well.
He noted comments on proposals to cut back overtime, and subsequently asked why overtime was needed.
Hood also questioned the amount of money spent on Station Road in Hillsburgh.
Miele noted that he is the only staff member on salary, the remainder are paid hourly.
One of his recommendations for the future would be rethinking whether senior staff should be on salary.
Maieron commented that gravel roads are very difficult to maintain. Though Maieron said he was not being critical of past councils, he said in the past, the province did have funds for municipalities to work on roads, but for whatever reason, the municipality did not access those funds.
Maieron contended that though expensive, paving roads would address some of the long-term maintenance costs.
Additional budget information is available on the Erin town homepage at www.erin.ca.
