Mapleton budget draft includes levy increase near 7%

MAPLETON – A first draft of the township’s 2023 budget shows a tax levy increase of nearly seven per cent is required to cover anticipated expenditures.

However, Mapleton finance director John Morrison says strong assessment growth of nearly 3% should keep the proposed tax rate increase under 4%,  adding about $18 per $100,000 in assessment to the tax bill of the average residential ratepayer.

Morrison explained in a Nov. 22 report to council the weighted assessment figure was the second highest in the county.

“And that was a very healthy growth number for us at this point in time,” he pointed out.

Morrison told council that inflation is putting pressure on the township’s budget.

The budget includes a proposed 7% cost of living allowance (COLA) increase for staff, which Morrison reminded council is based on a township human resources policy of using the Consumer Price Index figure at the end of August as the COLA raise for the following year.

At 7%, the COLA increase alone would cost $155,000 and force taxes up by 1.7%.

“Insurance is going to be up 33%, another 90 grand or so, operational materials and supplies are facing a 16.8% increase,” he stated.

“Fuel is up at least 5.7, telecommunications 5.1 contractual services 24%. Our IT services are up 18%.

“So there are some significant budget pressures and this budget is simply trying to address that, not looking ahead.”

A $246,000 transfer from the township’s tax rate stabilization reserves used in 2021 to keep the increase down has been removed from this year’s budget, he noted.

“So to start with … we would almost automatically have a 2.8% increase in the tax rate because of the tax rate stabilization account,” he added.

For the benefit of new council members, Morrison explained that in 2019, “we had such a marvelous year selling some of the properties up in the industrial park, we had a million dollar surplus.

“And the council of the day decided to give that money back to the taxpayers. And we gave that money back,” he said.

“But we cannot continue to use the tax rate stabilization and we had to remove it this year. So that put us under immediate budget pressure of 2.86 (%).”

Morrison pointed out cost increases have been partially offset in the proposed budget with an increase in Ontario Municipal Partnership funding from the province, projected increases to user fees and some operational savings.

The budget estimates revenues of $6,534,738, up from $6,298,680 in 2022, against expenditures of 15,994,677, an increase from $15,142,872 last year.

That leaves a levy of $9,459,939 to be raised through taxation, up from $8,844,192 in 2022.

The draft budget projects $7,680,632 in total capital spending in 2023, offset by identical figure from funding sources including reserve funds, gas tax transfer, development charges, grants and donations.

Morrison told council the municipality is looking at about $80 million in capital spending over the next 10 years.

“Public works is dealing with the maintenance of 375 kilometres of road, dealing with the maintenance of 220 culverts, they’re dealing with 92 bridges, they’re dealing with 18 kilometres of sidewalks, they’re dealing with 1,365 traffic signs, they’re dealing with 1,065 street lights,” he said.

“They have to deal with all the visible buildings that we have and the fleet accompanying it. Remember the scale of the operations that is going on here … that’s sort of what we need to think about.”

Although in recent years Mapleton has used a three-year budgeting process, the current draft budget is only a one-year projection because council was recently elected.

“Under the Municipal Act, it is a legislative requirement that we have a one-year budget at this time to give the new councillors an opportunity to understand the process,” Morrison explained.

“And then once they understand the process, they would be better engaged in developing that three-year budget.”

Councillor Michael Martin asked if there were any “mitigation strategies” under consideration to soften the budget blow of a 7% COLA hike.

“You mentioned that it was an HR policy that I was a part of creating,” Martin noted.

However, he added, “I don’t think that anybody at the time would have envisioned a 7% year over year COLA, on anything.

“But we are where we are. So do you have any potential mitigation strategies around the 7% number? I know it’s a very large number and it’s probably going to make me the least popular person in this room to even suggest something different, but there are numerous municipalities that have similar policies … but they’ve introduced kind of some mitigation strategies around … maybe lessening the impact on any particular budget year.

“Are there any suggestions that you discussed? Or that you’ve thought of? Or is it simply a 7% number that’s been inputted?”

“Do you want to continue to use the tax rate stabilization account for another year? That’s a mitigation strategy. Not sure that’s a good strategy, but you could do that,” replied Morrison.

“You could direct your CAO to look at staffing requirements is another strategy that may be reviewed. And finally, give us another number if you don’t want to go with the policy.”

Martin pointed out Wellington North has capped increases at 4% per year, with any amount over that  being transferred to the following year.

“But it only transfers once and it maxes out at 4%,” said Martin.

“I think 7%, politically and publicly, might be hard to digest. That’s very much a CUPE kind of want or ask.

“But I do understand … the policy is there obviously, we all signed off on it. I just wonder – that one might be a tough one for me.”

CAO Manny Baron said an approach similar to Wellington North’s has been considered.

“Just so you know, staff are absolutely prepared to discuss it,” said Baron.

“We are realists as well, and we do realize that seven is a high number, as well as zero was a year or so ago … it was a low number.”

Baron pointed out the presentation at the meeting was intended as an introduction for council.

“We always have, every year, another time that we really dive into the budget and we discuss it as much, or as little, as council wants to go into detail,” he added.

“Now, I think, is a little bit premature, because I don’t think we’ve had a chance to digest fully John’s presentation.”

“We’ll have plenty of time to discuss this as council,” observed Mayor Gregg Davidson.

“We’ll go over it three or four times before we make any decisions.”

Council accepted the budget report as information.