Draft Guelph/Eramosa budget anticipates 2.4% tax increase in 2022

GUELPH/ERAMOSA – After coming in with a zero per cent tax increase in the 2021 budget, the Township of Guelph/Eramosa is predicting residents will see a 2.4% increase in taxes to support the township’s 2022 budget.

That translates to an extra $6.31 per $100,000 of assessment for residents or an extra $31.53 a year on a $500,000 home.

In a Nov. 17 committee of the whole meeting, council heard from director of finance Linda Cheyne on the projected numbers in the draft budget for 2022.

Total spending in the 2022 budget came in at $21.2 million to fund municipal operations and capital initiatives.

Of that $21.2 million, $7.4 million (34.9%) will be funded through property taxes with the remaining to be sourced from user fees, grants, development charges and reserves.

Referencing the tax rate increase, Cheyne pointed to the cost pressures on the 2022 budget, which include an increase on the insurance premium and a 4.4% increase in wages/salary for township council and staff.

“Each year we do have a number of pressures that impact the budget,” Cheyne explained. “The first one I’m sure is at the top of the list for all the municipalities and it has been on our list for several years now – it’s our annual insurance premium.”

Cheyne estimated the township could see a 10% increase in annual insurance premium, noting that number isn’t finalized.

“Numbers haven’t been finalized yet, but in speaking with our insurance provider this kind of looks like where we’re headed.

“Another note there and I guess it’s what residents face as far as inflation – the municipality also faces – we have impact on operation for the cost of living, where things are going, the inflation area costs, those impact the capital [and] fuel costs are on the rise as well.”

Other factors contributing to the increase included costs for the fire protection service contract with the City of Guelph, changes in service to the township’s full-time bylaw enforcement officer, combining two seasonal positions to one full time positions for the parks and recreation department and the costs associated with the 2022 municipal election.

An additional $179,578 in property tax revenue is required to fund the 2022 proposed budget, setting the projected tax levy for 2022 at $7,611,180, an increase of 2.42% from the 2021 budgeted levy of $7,431,602.

The draft budget projects operating expenditures of $14,760,259 in 2022, up from the 2021 budgeted figure of $14,153,293.

Total capital expenditures are estimated at $6,617,915 for 2022, representing just over a $2.5 million increase from $4,100,040 in 2021.

Projected 2022 revenue is $13,943,154, up from the $11,090,731 in revenue budgeted for 2021.

“Preliminary, we’re heading in the right direction I think,” councillor Mark Bouwmeester said following the presentation.

“We have a good number where we’re aiming towards, so that’s key,” he added. “I don’t know if we ‘re there yet but we’re pretty close.”

“Nothing’s really changed in this budget. It’s kind of status quo,” Cheyne explained to council.

“We do have reduced costs that have been put through with regards to planning fees and with regard to legal fees just to bring it back to actual … but there’s not a lot of changes.”

Aerial fire truck purchase

One of the bigger ticket items on the 2022 capital budget is the purchase of an aerial fire truck, which was approved by council in 2021.

The purchase of the apparatus came in at a total cost of $1,298,315 with $121,286 to be funded through development charges and $352,029 to be sourced from reserves, leaving the township with $825,000 in long-term debt.

Cheyne noted the township has increased the transfer to reserves for fire and protection services this year “so that we can ensure down the road we have enough money there.

“We have had significant capital purchase over the last few years including the truck but absolutely we do have reserves going away so we can fund these in the future,” she added.

Fire chief Jim Petrik said the department has put the order in for the truck, and it is currently being built with an anticipated delivery of July of next year.

“I think we’re quite fortunate and appreciative of council approving it when we did because as of January first, across most of the apparatus manufacturing sectors – they’ve increased the cost of these by about 15% and the expected delivery times are getting close to two years now because of availability,” he explained.

“We did get it at a good time in terms of cost but also availability.”

The public works capital budget also came in at $3,109,000 which includes $530,000 for the resurfacing of Indian Trail from Wellington Road 29 to Wellington Road 44 and the repaving of approximately 1.8km along Jones Baseline between Stone Road and Highway 7 for a cost of $448,000.

Council forgoes wage increase

As part of the township’s corporate policy, the municipality was set to see a 4.4% wage increase for council members and staff as part of the 2022 budget.

However, council has agreed to freeze the salary for council members for the second year as the community “winds down” from the effects of the pandemic.

“Personally, I find if we were looking at keeping the overall tax rate increase … manageable, sustainable, low, then I think there’s an opportunity there to maybe not take the increase,” Bouwmeester said.

In response, Mayor Chris White pointed to the problems that can arise if council pay increases are postponed consistently over a long period of time.

“As you know some councils have fallen way behind and then they try and put a big wage increase in and it’s not viable,” White explained.

He continued, “My thought would be that for one more year and with COVID and the hardships people are facing, council foregoes the 4.4 because it is a considerable number for council, not dollar wise, not in absolute dollars, but as a percentage.”

White added while the increase should freeze for council, he wants to make sure township staff continue to see “what is a reasonable wage considering today’s inflation rate.”

Councillor Corey Woods was in agreement with freezing the salary increase provided they revisit the salary for council consideration in the new term of council.

“We are still here; we are doing the job that we’re elected to do,” he explained. “I can go along with not taking a salary increase this year.”

Councillor Bruce Dickieson agreed, adding it was fair to have the next term of council decide what the wage will be.

“This is the preliminary budget discussion, so whether decisions are made now or at a future date, if there’s a meeting next week, for example, or we make decisions as we go,” Bouwmeester said.

White directed staff to keep the salaries as presented in the budget for staff but noted council will freeze it’s own wages one more year and readdress it next year.

Council voted to accept the budget for information and a public meeting to receive input on the 2022 budget has been set for Dec. 1. More information can be found on the township’s website at www.get.on.ca/news/meeting-dates-for-2022-budget.