Councillors and staff still have a considerable way to go if they hope to reach less than double digit increases to the local portion of the 2013 budget.
Prior to the regular council meeting on Jan. 8, council met once more to get a clearer picture of the challenge faced.
Council had not met since late December regarding the budget.
The meeting began with a recap of Proposed Draft Num ber 2 of the 2013 budget.
That proposal was presented unofficially during last December’s public input meeting on the budget.
Town CAO Frank Miele explained the previous input helped drop the budget from the original 35% increase to a lower amount.
He said the figures we revised once more following the public input meeting to bring that number to 17.6%.
Miele said the presentation was intended to make clearer what was in the budget.
But staff also sought ideas from council on how to further reduce the budget “from 17.6% to whatever you want to bring it down to.”
This time, the budget information was divided to show the tax rate impact through changes to either the operating or capital portions of the budget.
Miele stressed “we really need your feedback so that at the next budget meeting we can start finalizing the budget.”
He considered the Jan. 8 meeting as more of a workshop approach, “because we’ve discussed things and are still at a 17.6% increase.”
Treasurer Sharon Marshall explained the night’s presentation was a new way of looking at the figures.
One of the first slides of the presentation noted the proposed net operating budget was increasing $702,810 [15.3% impact to budget] while net capital costs were going up $108,080 [2.3% impact to budget].
But it was also pointed out that within the net operating budget increase were $646,188 of non-discretionary costs which on their own equated to a budget increase of 14.05%.
Last year, council was able to use roughly $230,000 to offset budget increases, but without final figures from 2012, that option is not available.
Marshall also explained that like many municipalities, Erin’s Ontario Municipal Partnership Fund grant dropped by 10%, which represented another $65,000 of potential revenue.
Other main additional expenses facing the town included debt servicing costs which are almost up $137,000 and Hillsburgh fire hall construction costs pegged at $190,000.
Marshall noted the tax rate assumptions are based on each additional $46,000 raised being equivalent to a 1% tax increase.
Because these costs are based on items outside of council’s control, or because of previous council commitments, Marshall said the only options are to reduce the budget by a given amount.
Marshall also clarified these figures were not the overall budget, but rather the money which needed to be raised through taxation.
Based on an average assessment of $383,000, the proposed impact to ratepayers – based on the proposed 17.6% increase – would be $169.92 per year, $14.16 per month or $0.47 per day.
She noted that locally in 2012, Wellington County garnered the largest share of the overall share of tax dollars at 50.80%, followed by local school boards at 22.31% and finally the Town of Erin at 21.89%.
What Marshall considered good News is that the first draft included capital spending of $5.8 million for 2013.
But, she said, $1.17 million of that spending was to be funded through tax dollars.
In draft two, capital spending is slated at $6.5 million, but only $665,000 would come from 2013 tax dollars.
“One of the things I think is a positive step in the second draft is that under roads, there has been a fairly substantial increase to the expenditures – which includes an upgrade of two kilometres of road.”
The hope is to continue upgrading and/or paving an additional two kilometres of road every year, she said.
Marhsall said council has some options for reducing budget impacts for 2013.
Those include reducing expenditures by deferring capital projects; increasing debt or using capital reserves as tax stabilization reserves.
Councillor Barb Tocher said the budget involves a number of initiatives or assumptions which council first needs to have time for policy discussion.
Tocher also wanted to see finalized year-end number for a more accurate comparison of 2012 and projected 2013 figures.
She also said council needs to have a discussion on Erincinema.
She noted that both operating and capital costs for the cinema were removed from the draft budget, but it remains a council decision as to what happens.
Other initiatives proposed such as economic development and organizational reviews first require council policy discussions.
At present, Tocher was uncertain of what those plans were, or what they entailed.
She added “at this time, council has no idea whether there is a surplus [from 2012] which can be used, or whether there is a deficit which could impact this budget.
“Without that information, it is really hard to make a decision.”
Councillor John Brennan noted part of the revised budget included a 25% reduction to overtime.
However, Brennan asked what the impact of such a move would be.
He asked if this would result in the roads department waiting an extra hour before going out to plow the roads or whether local arenas will close earlier.
While Brennan realized the cuts would affect all departments, he wondered if the department heads had worked out how it can be accomplished.
Miele agreed that there will be some service impact, but senior staff have yet to determine what that would be.
He agreed that the impact to both the roads and recreation department were of particular concern.
“We recognize there is going to be an impact, but we have to make some very difficult decisions.”
Miele promised that he would come back to council with a report on the impact the move will have on local services.
Tocher commented the draft figures suggested the 25% cut to overtime would be accomplished without impacting service levels.
Miele explained that since most staff are paid by the hour, there are costs involved in attending any meeting outside of regular office hours.
“We want to minimize the overtime as much as possible.”
Tocher also wondered if figures could be brought forward to compare costs between bringing in additional staff versus paying overtime.
“A new employee sometimes costs more than overtime hours.”
Additional budget information is available online at www.erin.ca
