WELLINGTON NORTH - Tax increases were top of mind as Wellington North began its budget deliberations facing a 19.22 per cent hike.
“I look at the total levy requirement proposed in the budget, netting out 19 per cent and change and I’m glad I was sitting down when I first read it,” said Mayor Andy Lennox.
“My question then becomes, is there a potential for more OCIF (Ontario Community Infrastructure Fund) funding to help offset some of the capital project, and is there a potential to use reserve funds to offset some of the other projects? Is there a range that our taxpayers can live with, and how much do we need to pair out of the capital budget?”
Council held its first budget meeting on Monday night, with a proposed capital projects cost of $15,149,892 million for 2022. The majority of it is coming from the roads and drainage department, totalling up to $6.7 million.
Last year, the capital projects cost was $15,116,742, with a total cost of $5.4 million for the roads and drainage department.
Initial capital listing compiled for 2022 contained projects totalling $18,677,350; however, staff deliberations had identified $3.5 million in projects that could be deferred.
Some of the unfunded capital projects were: Mount Forest Sports Complex’s paving of parking lot with an estimated total cost of $160,000; structure 21 - sideroad 8 east with an estimated cost of $1.4 million; and concession 4N - sideroad 6 east to highway 89 with a total cost of $650,000.
Adam McNabb, director of finance for the township, presented the preliminary budget at the meeting, noted that, “the 2020 year-end balance is up to $16.1 million with a 2021 third quarter balance of $21.6 million; the largest contributor of the increase is FCM green municipal fund associated with the phase 1 Arthur wastewater treatment fund enhancements.”
The operating budget was around $5,477,939, while the policy mandated transfer to reserve funds was around $115,700; the net transfer was $466,136; and contributions to capital projects was $ 3,377,706.
As such, the total budgeted tax levy came up to $9,437,481 with a net tax levy year over year increase of 19.22 per cent.
“Unless otherwise identified, or discussed previously, all levy related capital projects have been funded by contributions to capital,” said McNabb.
Due to this, council discussed the possibilities of having a two per cent tax levy increase.
In response to the mayor's questions, McNabb said preliminary announcements pertaining to OCIF suggest the amounts for 2022 would need to be doubled, but that is not a one-to-one correlation of what the allocation would be for the 2022 calendar year for the capital budget.
The 2022 OCIF funding model is estimated to be $900,000, which means this would need to be significantly doubled in order to be able to fund all the other projects.
“Contributions from 2021 from a tax levy perspective would be about $2.39 million, however, in this iteration, we’ve only assumed it would be $347,000, so a near $2 million reduction just to elicit a response with regards what the levy impact would be if it was all funded in levy dollars,” said McNabb.
“So, to put into context, if we were to up the contributions from what it was from 2021 you would be looking at a tax levy increase in the vicinity of 2 per cent.”
However, the proposed two per cent increase still does not factor in the unfunded projects that totals up to $2.6 million.
Lennox recommended using reserves as council has done in the past, and noted to “go two and a half per cent over the growth target that we got from 2021.”
Coun. Dan Yake wanted staff to report back with a comparison of how much a one per cent, two, and three per cent tax increase would affect taxpayers as he noted it would help council decide on how much an increase they can finalize on.
Council will reconvene on Dec. 13 for another budget meeting, and will finalize the 2022 budget on Jan. 10.
