Mapleton council directs staff to prepare budget with 8.9% increase in local levy

MAPLETON – Council here has directed staff to prepare the 2020 township budget with an 8.91 per cent tax levy increase and a 4.18% tax increase.

If passed, the average homeowner will pay an additional $77.58 in 2020.

As part of Mapleton’s switch to a three-year budget plan, the 2020 levy increase front loads the tax impact to allow the tax levy increase to drop in 2021 and 2022 to 2.72% and 2.31% respectively.

“I’ve looked at studies from enough AMO conferences where municipalities, using this approach, have actually, over time, they’ve had their multi-year living increases less than the assessment growth,” said finance director John Morrison.

He told council on Nov. 26 it was about time the township made the switch to a three-year budget.

“Some of the larger municipalities have been adopting this for at least a decade,” said Morrison. “Some of the smaller municipalities are now starting to engage in this process as well.”

Morrison also presented council with other options, including placing the tax levy increase at 2.89% as previously discussed and 2.88% and 2.44% in the subsequent years.

However, Morrison suggested that option would not generate enough funding to meet a $9.6-million need in road reconstruction that extends beyond 2030.

In a third option, Morrison outlined placing the 2020 tax levy increase at 4.82% and a consistent 4.6% and 4.8% for 2021 and 2022 respectively. The option would result in a slight tax increase of 0.26% in 2020 and would maintain discretionary reserves at the existing level, but it would also mean losing about $2.5 million in reserve funds.

Councillors Paul Douglas and Michael Martin said they struggled to see the benefit of a three-year budget.

“What does that look like, say a year from now, if we do have substantial cuts in provincial funding?” asked Douglas.

According to Morrison, the three-year budget does not prevent council from increasing tax rates in any given year of their term.

“Again, it’s a planning tool that we would engage in an ongoing conversation between ourselves,” said Morrison.

While Martin said he liked that the three-year plan would allow tenders to be sent out more quickly,  he questioned whether council should introduce a three-year budget before the outcome of the water and wastewater project.

“For this year I would probably prefer to see a one-year budget, just until we get this RFP thing figured out,” said Martin. “It’s such a monetary value that it’s certainly nothing that I’ve had to make a decision on before in my term here on council.”

He asked if council could continue with a single-year budget and then introduce a multi-year budget next year.

Martin then reiterated  the benefits of the 2.89% levy increase.

“The number on the growth assessment [2.89%] for this year, I’m uncomfortable with that … That kind of gives us a respite year and then we get the nice picture of where we’re at after this RFP process,” he added.

Currently, the draft budget has $2 million set aside  for next year to pay for the first phase of updates to the water and wastewater systems if the RFP process does not see a consortium take over the project.

“I would caution lowering the tax burden without considering your growth for the next 10 years is a problematic exercise,” said Morrison.

Mayor Gregg Davidson reminded council that as part of the strategic plan, council outlined the total debt-to-reserve ratio should not exceed 2:1.

“Mr. Morrison, of the three options, which one is the best option to get the council’s goal of a two-to-one ratio?” asked Davidson.

“Option two would move  it the fastest, but option three  really is a fairly conservative approach as well,” confirmed Morrison.

Municipal growth

Much of the discussion focused around growth.

“In your one comment (you mentioned) the increasing pressures that growth places on the municipality, on infrastructure … So if growth isn’t paying for growth and the overall levy isn’t decreasing for the average person, why do we even bother to grow then?” asked Martin.

“I think some of the issues here is this municipality hasn’t seen enough growth. It’s been slow, almost non-existent,” said Morrison.

He added other municipalities have development charge funds that are much higher.

“But their levies and their reserves are also paying for a lot of the intensive capital requirements that are necessary,” said Morrison.

“I agree with Mr. Morrison that we need to look at growth and things were done in the past that didn’t help us grow good enough, like decisions were made,” said councillor Marlene Ottens.

“So here we are. We need the growth now.”

She asked whether council could introduce a three-year budget next year if it overlaps with a municipal election.

Morrison confirmed it could not.

Martin said it could be a two-year budget instead.

“I’m not sure because while it is important, I 100% agree with pretty much everything you’re saying, is it not also important to reflect back on say the previous 10 years and see where you’re coming from?” Martin asked.

“Because at the end of the day, whether it’s the taxes you guys are jacking at the county or whether we’re doing it here, it’s still the same person paying right, so … that’s really where I’m torn,” he said.

“I don’t think there’s one person around this table that wants to see their own taxes go up,” said Davidson.

“Absolutely none of us want to see this but we have to look long term at what is best for the community and what is going to be good down the road.

“If we can accomplish both goals, which I think we can with option two or three, the first tier of option two is high but for the next two are quite low and that said, that’s great for the rate payer.”

Following the discussion Martin suggested placing the tax levy increase at 4.82% for 2020, which was supported by Douglas.

A recorded vote resulted in a 3-2 split, with councillors Marlene Ottens and Dennis Craven and Mayor Davidson voting for placing the 2020 tax levy increase at 8.91% and councillors Douglas and Martin opposed.

Council expects to pass the budget on Dec. 10.