Kincardine tax rate hike
now sits at 6.32% after round
two of budget talks

By Liz Dadson

Kincardine council

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Kincardine council began round two of budget talks last night (Feb. 6) with a proposed 5.48-per-cent hike in the tax rate.

But after much arguing, debate and deliberation, and at the last minute, adding an extra $90,000 to reserves for capital projects, the proposed rate increase now sits at 6.32 per cent.

Treasurer Roxana Baumann gave a brief update from the Jan. 20 budget meeting, and said that since then, three changes were made.

The first was the $15,000 approved by council for the formation of a coalition to develop a nuisance noise bylaw. That was added to the operating budget, funded by the tax rate.

The next hit to the budget was a 1.9-per-cent decrease in the education tax rate for industrial property, meaning a loss of $130,000 in payment-in-lieu (PIL) from the hydro properties. Total retained amount for 2014 will be $2.4-million, down from $2.53-million in 2013, meaning an increase of 1.46 per cent on the tax rate.

The third issue was the sale of Bruce Telecom, announced Jan. 22 and expected to be finalized later this year at a transaction value of $26.5-million.

Baumann said that historically, Kincardine received $800,000 to $1-million in annual dividends from Bruce Telecom which was used to off-set property taxes. 

In order to benefit from investment income as an additional revenue source in current and future years, and to support the achievement of long-term fiscal sustainability, the proceeds from the sale should be preserved and invested prudently, she said.

However, since the sale has not been finalized and net proceeds are yet to be substantiated, Baumann recommended council continue budget talks without including this transaction.

She asked council to approve a motion that any and all decisions pertaining to the disbursement of funds received from the sale of Bruce Telecom, be withheld until the sale has closed, and the short-term and long-term financial implications of any such decisions may be duly analyzed by staff.

Deputy mayor Anne Eadie asked if the 2014 budget includes any dividend from Bruce Telecom.

"Yes," said Baumann, "there is $800,000 in the budget."

Mayor Larry Kraemer said Bruce Telecom remains a municipal asset through the first quarter of 2014 and the dividend was paid through four installments. Plus, whatever money is made through the first quarter will accrue on top of that.

Council approved the motion as presented by Baumann.

Eadie recommended the $15,000 come from reserves and then that money would be replaced by future revenue from the Armow Wind project once it is up and running.

Councillor Kenneth Craig disagreed, saying the $15,000 should come from the tax rate.

Councillor Maureen Couture said the municipality already receives money from the Enbridge wind farms.

Council agreed to take the $15,000 from reserves.

During further debate about trying to make cuts to the operating budget, Couture said the fundamental problem for Kincardine is that it costs a certain amount to run the municipality. But each year, there is further downloading and loss of revenue.

"Putting $70,000 into capital projects each year just is not sustainable," she said. "If you want to pave roads and replace equipment, it costs money."

"I would like to know why our PILs keep getting cut," said Eadie.

"The upper levels of government are balancing their books on the backs of the municipalities," said Kraemer.

Council drifted into far too much discussion over the funding that has been lost which turned into a shouting match between the mayor and councillor Randy Roppel, regarding who is paying for the $9-million water and sewer project in Inverhuron. 

"You (Kraemer) and this council are living beyond your means," argued Roppel.

"You're sitting at this table too, Randy (Roppel)," said Kraemer. "We have to stick with reality. You're good at saying things but not good at accomplishing them."

Councillor Jacqueline Faubert said council has agreed it wants to stick to a low tax-rate increase this year. She suggested council decide if there are surplus buildings that could be sold, and whether nine councillors are needed at the table.

Otherwise, she said, "if we want the current services we enjoy, then we have to bite the bullet and increase the tax rate."

Kraemer said the municipality is putting into reserves about $800,000 on $5.3-million worth of capital. 

"We need to raise the required amount to operate this municipality," he said. "And Randy (Roppel), you can say it's my fault; you've been saying that for seven years. We either raise the appropriate amount or we dance around the issue all night."

He said the PILs from the hydro properties in the Municipality of Kincardine have supported the tax rate over the years, and if the education taxes were to increase, Kincardine would recover that money.

"But that's not happening," he said. "We used to receive $3-million in PILs, now it's down to $2.4-million."


Councillor Candy Hewitt said comparisons of Kincardine to other municipalities does not help hammer out a budget for Kincardine.

"We are living in a beautiful municipality," she said. "We need to maintain what we have and maintain our standard of living, that's why people live here. Everyone wants the taxes to go down. But the taxes you pay are based on the (residential) assessment you can afford. My concern is for the people on fixed incomes and whether they can pay the taxes on their homes."

Regarding amortization for the municipality, Baumann said Kincardine has $120-million in assets based on historical cost, not replacement cost. She said council should be contributing $7-million to reserves per year, not the $700,000 it is now.

As council focused on other capital projects and initiatives, it was agreed to take $150,000 out of the Ward 1 industrial reserve fund and give it to the Kincardine Lions Club for the proposed Splash Pad project. That is in addition to the $150,000 that the club already has in the bank. This would be one-time funding to ensure the project proceeds.

And of the other dozen projects, the only others to receive any funding, on the tax rate, were $40,000 into a reserve to do a preliminary study of the Whitney Crawford Community Centre and Tiverton Sports Centre; and $50,000 into a reserve fund for the Inverhuron Pavilion project.

That puts the tax-rate hike at 6.32 per cent or an increase of $75.20 for the average residential assessment of $245,000.

Council also discussed the community grants which were capped at $50,000 this year.

The one change to the report was to remove a $1,000 grant to the Kincardine Theatre Guild for flooring in the basement of the Kincardine Arts Centre because that work will be covered in the renovations.

That $1,000 will be split between the Kincardine Community Concert Band ($500) and the Fish Kincardine Derby ($500).

The following community grants were tentatively approved:

  • Recreation groups - $25,000, to be divided based on enrollment numbers - including Kincardine Minor Ball, Kincardine Minor Soccer, Kincardine Kippers Swim Club, Kincardine Minor Hockey, Kincardine Skating Club, Tiverton Minor Sports
  • Bruce County Plowmen's Association, $450
  • Grey Bruce Woodturners' Guild, $500
  • Kincardine artist banners, $500
  • Kincardine Chamber of Commerce, Santa Claus Parade, $200
  • Kincardine Summer Music Festival, $1,500
  • Lovat Cemetery Board, $2,250
  • Paddy Walker Heritage Society, $1,500
  • Paisley Agricultural Society, $500
  • Tiverton Agricultural Society, $1,000
  • Bruce Township Historical Society, $500
  • Victoria Park Gallery, $500
  • Multicultural Day, $600
  • Community Living of Kincardine and District, $1,500
  • Kincardine Agricultural Society, $1,000
  • Kincardine Chamber of Commerce, annual achievement award, $540
  • Kincardine Legion, $1,500
  • Women's House Serving Grey and Bruce, $2,000
  • Lake Huron Fishing Club, $2,200
  • Bluewater Summer Playhouse, $1,000
  • Lighthouse Blues Festival, $2,000

The budget will be brought back for further discussion at council's regular meeting Feb. 19.

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Thursday, February 06, 2014