ERIN – Town council is looking at a proposed tax increase of two per cent, most of which would be held in reserve for future projects.
The first draft of Erin’s 2020 budget was presented at a special meeting on Nov. 19, and while councillors asked questions, they did not request any changes.
If eventually approved, the tax increase would mean an extra $29.57 payable for a residential property assessed at $500,000.
The increase is for town taxes only, which make up 27.5% of the total tax bill. Education taxes represent 15% and Wellington County taxes 57.5%, and the tax total can also rise due to higher property assessment.
For 1,940 urban properties, the annual streetlight service charge will go down by about $31, thanks to new LED streetlights that are saving the town $40,000 in energy costs per year.
Staff are also recommending tax hikes of 2% in each of the following three years, but these would still have to be approved annually.
“A two per cent tax levy increase will continue efforts in the past few years to set aside funds to replace and repair existing bridges, culverts, community centres, vehicles and equipment,” said finance director Ursula D’Angelo, calling it a “prudent and responsible approach”.
The second draft of the budget will be presented on Dec. 3, with final approval scheduled for Dec. 17.
The draft budget has expenditures totalling $12.9 million. The existing tax levy will bring in just over $7 million, with grants, user fees, other charges, assessment growth and the tax increase making up the balance.
Capital requests for 2020 total $4.1 million. The town currently owes about $3.6 million and D’Angelo is proposing no new debt in 2020.
The infrastructure tax levy will see $112,400, equivalent to a 1.55% tax hike, added to the flow of money to the infrastructure renewal reserve, as established in previous budgets.
The recently approved asset management plan recommended the infrastructure levy be increased 1.2% annually to ease chronic underfunding of infrastructure upgrades, but D’Angelo said more is actually needed.
The town will put $699,459 into the Infrastructure Renewal Reserve in 2020, compared to $587,059 in 2019, with projected contributions of $845,000 to $1 million in 2021 to 2023. The balance of the fund is expected to be $3.7 million at the end of 2020, rising to $5.4 million by 2023.
The total of the town’s many reserve funds is projected at $11.3 million in 2020, rising to $14.8 million in 2023.
Public participation was minimal at the budget meeting and at presentations from each town department on Nov. 20 and 21, but there were 306 responses to a budget survey this fall.
The assessed value of Erin properties has risen steadily over the last 10 years, from a total of $1.7 billion in 2010 to $2.9 billion expected in 2020, an increase of 70.6%.
For 2020, estimated assessment growth is $351,000 or 4.98%, with 1.55% related to new construction and 3.43% to assessment increases for existing properties.
The draft operating budget shows the net cost of administration at $1.39 million. The net cost for roads is $2.43 million.
Expected expenditure for recreation and parks is $1.32 million, but with revenue of $655,000, the net is $666,000. Revenues entirely cover the cost of the building department ($360,000) and water department ($1.39 million).
Resource requests include $100,000 for the wastewater financing options study (funded by water reserves and development charges). There is also $75,000 for a development charges study and $40,000 for community improvement grants.
There will be an official plan review, a storm water management study and a fire and emergency master plan, all funded 90% by development charges. There is a $75,000 request to cover the first six months of the cost of a wastewater project manager and $50,000 for increased roads maintenance.
Capital requests include $2.4 million for Erin Community Centre upgrades, dependent on getting a $1.77-million grant, $600,000 to replace a culvert on Station Street, $450,000 for a new fire tanker truck and $127,000 for Hillsburgh Community Centre upgrades.
There is $84,000 requested for maintenance at parks and parkettes, $80,000 for electronic data records management, $72,000 for water system upgrades including energy efficiency and $40,000 for shared costs with the school board for Centre 2000, including sewage treatment and other renovations.