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Kincardine could be facing major tax hike this year By Liz Dadson |
Kincardine council To Comment on this article Click Here |
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Kincardine council will be sitting down this afternoon (Feb. 1) to scrutinize last year's budget and try to find some cuts to make for the 2011 budget. In committee-of-the-whole Wednesday night (Jan. 26), treasurer Brenda French presented a financial recovery plan structure which will help the municipality get its operational spending in order. For about five years, Kincardine has been using reserves and reserve funds to balance the budget and pay operating expenses. French said that is not sustainable, particularly with the loss of some major funding. This year, Kincardine is losing $229,900 from the Ontario Municipal Partnership Fund, $85,400 from the education portion of the payment-in-lieu tax bill at the Bruce Nuclear site, and $200,000 from the typical Bruce Telecom dividend. The municipality is already on the hook for $100,000 in a two-per-cent staff salary increase, $373,700 for unfunded waste management, $368,536 for the annual payment for the Kincardine Community Medical Clinic, and $270,000 for roof repairs for the municipal administration centre which was put off last year. In total, the shortfall sits at $1.9-million, said French. She presented three pre-budget tax options which would allow staff to draw up a budget proposal. The first was a zero-per-cent increase which council dismissed immediately because it relied heavily on reserves and reserve funds to make up $400,000 of the operating shortfall. This option also dropped $8,000 for the municipal Christmas party and $12,000 in community grants. The next was a three-per-cent increase which immediately allowed the $8,000 for the Christmas party and the $12,000 for community grants. The tax increase would bring in $168,000, surplus funds due to the Bruce Power support of the physician recruitment program equals $125,000, user fee increase brings in $125,000, reserves and reserve funds chip in $300,000, hiring freeze is another $57,000, capital deferral amounts to about $1-million, and savings from the governance system changes equals $38,520, with overtime reduction allowing an additional $29,480. The third option was an eight-per-cent increase which would provide $448,000 in extra tax money, plus the same portions from physician recruitment and user fees as the previous option. Reserves and reserve funds would kick in $200,000, with the same numbers for everything else, except capital deferral would be only $800,000. Capital projects that must be completed this year include the waste management facility at $1,457,400, the Kincardine Arts Centre at $248,015, Davidson Centre gymnasium at $495,000, Connaught Park Washrooms at $150,000, and Mahood Johnston Drive at $457,000. Besides the new roof on the municipal office at $270,000, the municipality has to purchase a new pumper truck for the fire department at a cost of $450,000. French said an eight-per-cent tax increase would put the municipality back to properly paying for its operating costs, rather than taking those expenditures from reserves and reserve funds. However, the staff recommendation was to go with the option for a three-per-cent increase. Mayor Larry Kraemer said the problem occurred in 2005 with the end of area rating. At that point, Ward 1 taxpayers received a huge break while Wards 2 and 3 paid more. "We need to commit to balancing the budget before our term is up," he said. "I support a three-per-cent increase," said councillor Maureen Couture. "Zero-per-cent means we've got our heads in the sand, and an eight-per-cent increase is too high."
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Councillor Mike Leggett said three-per-cent isn't going to cut it, when the municipality has large capital projects looming, not just operating expenses. "We need to make cuts and council has to have that discussion," he said. Council agreed that it must do a service delivery review in order to determine what the proper level of operating costs should be for Kincardine. Councillor Randy Roppel suggested having the service delivery review done by an outside source because council can't seem to see what has to be cut from the budget. Councillor Kenneth Craig said the service delivery review has to be done before the budget discussions so council has some idea of where it can cut services. Deputy mayor Anne Eadie asked if the options presented had figured in the asset growth in Kincardine for 2010. "We have not done that yet," said French. "We worked on a three-per-cent increase based on the assessment available." "The assessment growth would be good information to have," said Eadie. "We have to find a way to run this municipality efficiently," said councillor Candy Hewitt. "We should set the target high and if we can come close, fine. We're not expecting perfection. We can't fix the problem until we actually make changes." Kraemer clarified that there are $8-million in reserves and reserve funds, but it's not all liquid funds. He agreed that a review of services must be done right away, but he would also like council to go over the 2010 budget and look at all the programs and services provided by the municipality. "Nobody wants the taxes to go up but the business of the municipality has to be done," he said. "There is a perception that we have loads of money, but that's because we include Bruce Telecom. That's an asset worth $33-million to $34-million and it provides an annual dividend." He noted that Kincardine has the second-lowest tax rate in Bruce County. "If we had the same tax rate as Saugeen Shores, we would have an additional $1.145-million in tax money to work with," said Kraemer. "Saugeen Shores is 174 square kilometres in size, while Kincardine is 543 square kilometres in size - we are three times larger, geographically. That means more roads to plow, more water and sewer lines, and more people required to run it all." Council directed staff to set up the budget proposal with a three-per-cent increase. Scrolling stops when you move your mouse inside the scroll area. You can click on the ads for more
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