Council discusses 2.9% tax levy increase in draft budget

MAPLETON – Council discussed a minimum tax rate increase of zero per cent and minimum 2020 tax levy increase of 2.89%  during the first draft budget meeting on Nov. 15.

With a 2.89% increase, the total tax levy would be $8,032,345 – an increase of $225,616 from 2019.

“At 2.89% the taxpayer would have the same tax burden as they did last year, on average,” finance director John Morrison told the Community News.

Initially, Morrison presented council with a tax levy increase of 2.74% in an attempt to keep the rates close to the consumer price index, before opting to make his minimum recommendation based on the 2019 assessment growth.

“Theoretically, it would be good practice that our tax rates never go lower than the assessment growth rate because at 2.74[%] we are going backwards not staying the same,” said Morrison.

Capital budget

The capital budget for 2020 is projected at $5,946,100 and a total of $51,252,960 over the next decade.

Total operating expenditures for 2020 are $13,142,280.  Broken down by category,  49% is allocated to transportation services, 11% to environmental services,  11% to protection to persons and property, 11% to general government, 9% to recreation and cultural services, 5% to planning and development, 2% to health services, 1% social and family services, and 1% taxation.

A major item on the capital budget is the water and wastewater “plan B” if the RFP process is ultimately unsuccessful.

Plan B is currently budgeted for $2 million in 2020 for the pumping station, $2.5 million for the ammonia treatment reactor to reach 1,300 m3/day in 2023, and $1.5 million for phase two of the water tower in 2028.

“Just to make the plan work from a capital point of view, we had to transfer about $6 million over the next 10 years,” said Morrison. “And each one of these was assumed a 25-year loan at 2.26%.”

Infrastructure  funds

According to Morrison’s presentation, staff also projects a roughly 30% decrease in reserve funds over the next 10 years.

“The funding is decreasing over time. And that goes back to that sustainability,” he said.

“It also goes back to the fact that I’m hoping we didn’t make many mistakes in terms of how we costed out some of those capital projects because they would be indicating, if we did, our ability to respond to something that’s unplanned.”

However, a minimum  increase to the tax levy of 2.89% would mean more money going into the reserves.

“What you’re doing is providing healthier reserves as you move forward … all that extra money would go directly into the reserves,” he said.

Morrison added he thought it would be “wise” to separate the township’s operational requirements and infrastructure requirements on the tax bill.

“You could see a significant increase in the reserves … moving forward means the same per-hundred-thousand dollar (tax) rate,” he said.

“But it’s more clear to the taxpayers that this infrastructure is needed for our roads, this infrastructure is needed for probably the most critical investment that we have, which would be for the water and wastewater project that is needed over the next 10 years in order to enable the municipality to grow and the economy to diversify,” he said.

Councillor Marlene Ottens supported the idea of separating out the items on the tax bill.

“I definitely am in favor since we obviously don’t have enough … but I do like it when it’s visible in this manner not just tacked on a random increase. I think people are more willing to pay that if they know it’s specifically going to go to that,” she said.

Councillor Michael Martin argued against the idea, saying that residents are able to see where money from taxes is going by coming to public meetings and reading through the budget online.

“I think for this year I’m not really comfortable adding an infrastructure tax like other municipalities are doing,” said Martin.

“We told people, for the last six years I’ve been here, what we’re doing with our money, right? And they can come out to the public meetings or read the literature; it shows where all our money’s going, including reserves.”

Mayor Gregg Davidson advocated for not discussing further increases to the tax levy until council and staff had the chance to present the draft budget to the public on Nov. 19.

“I talked to a number of members of the community; they’ve actually told me, ‘Don’t go back to zero, go higher than that, because we have infrastructure needs to be done,’” said Davidson.

Council supported Davidson’s recommendation to hear from residents at the Nov. 19 public meeting before discussing the tax rate and tax levy increase.

Council plans to approve the budget on Nov. 26.