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 Kincardine facing 10% hike in taxes this year
By Liz Dadson

Kincardine Council

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Treasurer Brenda French prepares to deliver the budget

Residents of Kincardine could be facing a 10-per-cent hike in taxes this year.

This would mean an increase of $70.69 on a median (most common) residential assessment of $183,000, for the municipal portion only. The remainder of the tax bill includes the Bruce County levy and the education tax which have not yet been determined.

Kincardine council members opened their binders last night (March 1) at the first budget meeting and had a glimpse of the major job in front of them.

Treasurer Brenda French said the primary challenge for 2010 is the loss of revenue and increase in expenses which equals about $1.3 million.

Council had directed staff to reduce operating budgets by 6.5 per cent, said French. The municipality was also looking at a $500,000 reduction in the capital budget, and trying to maintain a 6.5-per-cent increase on the median residential assessment.

French said some departments were unable to meet the 6.5-per-cent target in reducing their budgets, without affecting service levels. She said capital was reduced by using reserve funds or capital grants, plus there was a significant draw on reserves in the amount of about $4.4 million, for the sixth straight year - a trend that concerns the treasurer.

In addition, $880,000 was brought in from the tax mitigation reserve fund to compensate for the loss of revenue, leaving nothing in that reserve, said French.

"There is currently no plan on how to replace the revenue in the 2011 budget, other than through significant tax increases or expenditure reductions which would have to include services," she said. "Council is asked to carefully weigh the impacts of current year decisions and tax rate setting on this municipality's sustainability."

She stressed that sustainability was one of the key points in the 2010 Community Plan.
French also urged council to consider not only what is required for this year's budget, but for five or 10 years down the road. To that end, she recommended the following:
  • In May, 2010, review the Five-Year Capital Budget Forecast.
  • Amend policies so any year-end surplus goes to a reserve, or a deficit is drawn from a reserve fund, so each year starts from a consistent position of zero dollars.
  • Amend financial policies so business plans have such information as service levels, impact of capital projects on future operating and capital costs, and relevance to the Community Plan.
  • In September, 2010, hold a special meeting to determine the parameters of debt and reserve fund levels.
  • And council should move its tax rate to the median of the Bruce County municipalities within a fixed number of years.
French noted that Kincardine has the second-lowest tax rate in the county because it has a revenue stream that other municipalities do not, plus, it provides a high level of service. When compared to Saugeen Shores, which is similar in size and service levels, Kincardine's tax rate is 24 per cent lower, she said.

Councillor Ron Hewitt spoke for most of council when he said he could not support a 10-per-cent increase in taxes. "There are service cuts to be made," he said. "We need to look at a mechanism for service evaluation."

Deputy mayor Laura Haight said there are three ways to make up the shortfall in the budget: increase taxes, reduce services, or sell off certain assets.

Council managed to get through most of the operating portion of the budget. It will continue budget talks Monday, March 8, at 5 p.m., in the council chamber at the municipal administrative centre.

 

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Monday, March 01, 2010