It was a presentation intended to soften the blow of a probable 7.7% tax levy hike – a 2.2% tax rate increase for Wellington North homeowners.
And apparently, it worked.
Few budget proposals are followed by applause, but that is what happened Monday night following finance chairman Andy Lennox’s presentation of its impact on ratepayers.
For homeowners, it amounts to an average increase of $82 to their 2011 tax bill.
It was a packed council chambers on May 9, although councillors and a sizeable contingent of staff were in the audience for the presentation. Lennox explained the budget overview and plans for 2011. He then illustrated the changes, using the example of a home assessed at $270,220.
Though it might seem like an odd number, Lennox said that assessment results in total property taxes of $4,000 in 2010. Of that, the local portion is $1,437 while the county portion is $1,911, with $651 for school boards.
Lennox cited the top areas of spending in 2010 were public works at 40%, recreation at 23%, administration at 15% and the fire department at 10%, plus smaller budget items.
“To me it didn’t really mean much as percentages,” he said, which is why he offered an idea of how many dollars are involved.
In terms of the local tax bill, Lennox said those amounts equated to $575 for public works, $336 for recreation, $213 for administration and $145 for fire.
“I have to tell you, when I went through this exercise it was quite enlightening to me personally,” he said.
He added, “In the back of my mind, I had the idea that fire services were expensive with the big shiny fire trucks and fire hall. I know we have volunteer firefighters and depend on them heavily. But when I looked at this I thought – for $145 – I’d pay that any time for the kind of service we enjoy.”
The same story applied to public works. Lennox said if he hired someone to blow the snow from his lane in the winter, “I wouldn’t be long getting rid of $500. It was quite a revelation to me that we get the whole road network maintained and looked after for that amount of money.”
Some of the main impacts to this year’s budget include reductions to the Ontario Municipal Partnership Funds, an annual operating grant from the province. In addition, Lennox said there are increased operating costs through wages and debt repayments.
He said the draft budget assumes that capital spending, reserve transactions and debt repayment added together would be maintained at $1.8-million and include no changes to the service levels – as a starting point.
“We wanted to have a budget to compare last year’s apples to this year’s apples – not to compare last year’s apples to this year’s oranges,” said Lennox.
After a review of operating expenditures, changes to service levels, capital projects and reserve funds, the first draft budget included a 12% tax levy increase or 6.2% tax rate increase, Lennox said.
“Don’t be alarmed; this is where we started,” he said.
That proposal included all the proposed changes to service levels, operating expenses and capital projects with the inclusion of all reserve transactions and debt repayment added together and maintained at $1.8-million.
Some of the increases included Arthur fire employee benefits, fire prevention supplies and lost wages (to allow them to take training).
Lennox said preventing fires is cheaper that fighting them, so the money will be well spent. For the Mount Forest Fire Department there were a number of training costs.
Public works came in $200,000 below budget for 2010, but Lennox suggested that is due to lower winter maintenance costs. As a result, he said council didn’t think it was a good base to propose this year’s budget. Instead there is a proposed 2% increase over the 2010 budget amount – instead of what was actually spent.
As for debt repayments, Lennox said, “We have to repay the debt incurred for certain projects. We can’t really get out of that.”
One of the main issues Lennox brought to the meeting were proposed changes to the recreation budget. He said it came in with a 7.2% increase in net expenditure over the 2010 budget and 17% over 2010’s actual costs.
“Our feeling was that was not a very sustainable path to be on.” He said council needs to consider other options to help the department operate more cost effectively.
Lennox said, “It doesn’t operate the way you would think a normal business operates.”
Projected revenues for 2011 are $740,740 while planned operating expenditures are $1,483,867. Planned capital costs are $874,788, less the anticipated Southgate contribution to capital of $100,925.
As a result, Lennox explained revenues account for only 35.6% of the costs to run the recreation department. “It means we are subsidizing the other 64% through tax dollars.”
While he suggested that may not be wrong, “it requires a unique way of thinking.” He said in typical business scenarios, revenues exceed expenses.
Lennox said there needs to be an evaluation of programs and practices to determine the most appropriate actions. That could involve modifications to, or the dropping of, some programs – or beefing up others.
What is important, he said, is to communicate to the public what the actual costs associated with programs are. While he could not speak for all council members, Lennox had received complaints about the rising costs in the recreation area.
“It’s sometimes hard to explain why their costs are going up,” he said, adding having the information will help council determine a new path.
One change might be to re-evaluate the service pricing and subsidization policies. The decision of council so far, is to follow the budget of 2010 for 2011 – less $50,000 in proposed net expenditures.
In addition, Lennox said the intent is to allocate $25,000 to perform a complete cost accounting study by service offered.
“Maybe we can find ways to do things better.” Lennox said based on the current changes, that would result in a 7.7% tax levy increase or 2.2% tax rate increase.
Going back to the home assessed at $270,220, he explained total property taxes would seem to drop from $4,000 to $3,943 – in part due to decreases in the county and school taxes – even though local taxes would have increased.
However, once assessment increases of roughly 3.7% are taken into account, Lennox predicted further increases to $4,089 – with local taxes now up $82 for 2011.
Charts across the council chambers highlighted some of the changes proposed for this year’s budget which includes:
– the addition of two firefighters in Mount Forest;
– increased fire department operational costs for training;
– equipment for the new Arthur pumper truck, $26,000;
– roof repairs for the Mount Forest fire hall, $26,000;
– multi-purpose utility vehicle, $20,000;
– educational fire safety house, $9,000;
– reserve for a new tanker truck for the Mount Forest fire department;
– increased training costs for council due to the number of new council members;
– $15,000 for an operational reserve to further study options towards the possible implementation of accessibility transit;
– $28,125 budgeted for the inclusion of a human resources/training/payroll staff person;
– $25,000 cost to analyze recreation service delivery and financial implication – operational costs are to be frozen at the 2010 levels;
– $3,000 for blinds in the Plume Room at the Mount Forest Sportsplex;
– $55,000 in repairs to the Lion Roy Grant Pool in Mount Forest;
– $50,000 for new playground equipment in Mount Forest;
– $40,000 reserve for recreation equipment replacement;
– $100,000 rural road construction and bridge repair;
– $60,500 backhoe for the Arthur works yard;
– $60,500 gravel trailer;
– $95,000 street sweeper;
– $15,000 radio communication upgrades;
– $360,000 Mount Forest Main Street Connection Link work from Queen Street to the southern limit of Mount Forest;
– $300,000 resurfacing of Line 8 between County Roads 16 and 14; and
– $215,000 for Concession 4 river bank stabilization.
Lennox stated that based on audience requests, his powerpoint presentation of the night would be posted at www.wellington-north.com.
Council intends to adopt a version of the budget at its May 16 council session.
