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Kincardine taxpayers facing 12% rate hike By Liz Dadson |
Kincardine council To Comment on this article Click Here |
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Kincardine taxpayers are facing a 12-per-cent rate hike in the 2011 budget. In the final round of budget talks last night (March 28), and after extensive, lengthy debate, council agreed with the tax increase which is the equivalent to $90 extra on the median residential assessment of $196,000. Last night's meeting was supposed to address capital projects. However, it dealt more with whether to stick with Year 1 of the Four-Year Financial Recovery Plan as laid out by municipal staff, or continue to add more and more projects regardless of the rising tax increase. During discussion, the first thing to be added was $10,000 for firefighter training as requested by councillor Mike Leggett. He said fire chief Jamie MacKinnon had $1,000 in the budget last year but actually used $16,329 for firefighter training. MacKinnon said the training cost varies from year to year, but he admitted to having five new firefighters already hired for the Tiverton station, and the cost will be $1,000 each for training. Councillor Kenneth Craig said that the engineering for Phase 3 of the Huron Ridge reconstruction should be put into the 2011 budget so the actual construction can be done in 2012. That amounts to $105,000, jacking up the tax hike to almost seven per cent. Deputy mayor Anne Eadie questioned why council was all of a sudden adding projects to the tax rate, forcing it beyond a reasonable level. Councillor Maureen Couture agreed, saying that municipal staff drew up a four-year plan for financial recovery which already includes spending more than $1-million on completing capital projects that are under way. "We need to make a decision here," she said. "The four-year recovery plan came with a capital freeze which is no freeze at all. We're still spending millions of dollars. Eadie said she understood that council was going to follow the recovery plan and do capital projects gradually, not all in one year. "If we're going to change that process, then we need more tax cuts and, I mean, look at some serious cuts." Treasurer Brenda French told council the annual depreciation of assets sits at $4-million, on total municipal assets valued at $183-million, as per the recent Public Sector Accounting Board program and the 2009 financial statement. Mayor Larry Kraemer said council has to seriously look at putting money into reserves and reserve funds to pay for all the capital spending that is being deferred. French said the entire tax bill collected by the municipality includes the Bruce County levy and the education tax. The county levy has increased by 0.15 per cent this year, while the education tax has increased by 2.92 per cent. Combined, they equal about $13 extra on the median residential assessment. "This year is an opportunity for us to get our house in order, financially, without hurting the taxpayers significantly," said councillor Ron Coristine, "because the education tax and county levy increases are lower." Eadie said there are always going to be infrastructure deficits, given all the municipality has to do. She would have preferred gradual tax increases each year, around the four- to five-per-cent mark, over the four years. "I don't believe the people of Kincardine are poorer than the people of Saugeen Shores," said Kraemer. "We have one of the lowest tax rates in all of Bruce County. Unless we were to close the Davidson Centre, we need to increase taxes." French said Ontario Power Generation (OPG) pays $2.8-million each year in payment-in-lieu of taxes for the property at the Bruce Nuclear site, but uses up a significant assessment land base in the municipality. "The political answer (regarding OPG tax payment)," said Kraemer, "is that the Province of Ontario owns the land and the province does not want to give us more money." Councillor Kenneth Craig said he appreciates the concerns about increasing the tax rate. However, he noted that in less than 10 years, the freon cooling system at the Davidson Centre must be switched to an ammonia system which will cost $400,000 in today's dollars.
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 "The absence of transfers to reserve for this item is frightening," he said. "We need to build up our reserves, and we can't address that with a three-per-cent rate hike. We can barely scratch it at six per cent." Councillor Candy Hewitt agreed that the three-per-cent hike was just a starting point. The actual tax increase must be much higher to be realistic. Kraemer said Kincardine cannot have a capital holiday and a reserve holiday at the came time. Couture said the municipality has assets it can sell, plus a reserve of $750,000 set aside for a tourist booth that could be re-allocated to another project. "A capital holiday is misleading," said Eadie. "Maybe we have had a reduction but we're still doing significant capital spending." "We've had a major capital deferral," argued Kraemer. "We have moved everything in our five-year capital forecast from 2011 to 2012." Councillor Jacqueline Faubert questioned what the mayor meant when he said the municipality has been "running for years." Kraemer said up until 2005, the municipality was growing its reserves. Then, when area rating was removed, council agreed to reduce Ward 1 taxes by about 26 per cent, resulting in a significant reduction in revenue. Eadie said she is content to stick with the four-year recovery plan which council agreed to, in principle. "If we change and go with a tax increase of eight to 10 per cent, everything should go back on the table again, including staffing." Kraemer said his concern is that nobody wants to raise taxes but that's what is required to put the municipality back on the right track, financially. French said if council agreed on a 10-per-cent tax increase, it would add $75 to the median residential tax bill. Couture put forward a motion, seconded by Faubert, to increase the taxes by 12 per cent, adopt the four-year financial recovery plan, in principle; and for 2011, do the following: an internal organizational review, an asset amortization, and a review of the reserves and reserve funds. This way, council would put 6.9 per cent toward the tax rate, and five per cent ($300,000) toward reserves. Kraemer said he would like to see a 15-per-cent hike which would fix reserves and help stabilize income. "I can't support 15 per cent," said Couture. In a recorded vote, council approved the 12-per-cent tax increase, and associated tasks, as outlined in Couture's motion, by a vote of 5-3. In favour were Couture, Faubert, Kraemer, Hewitt and Craig. Voting against the motion were Leggett, Eadie and Coristine. Councillor Randy Roppel was absent. A budget bylaw will come forward in late April for final council approval. Scrolling stops when you move your mouse inside the scroll area. You can click on the ads for more
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