Municipal Tax Rate to Rise by 2.85%

Many external pressures made this year’s budget formulation particularly challenging.  Inflation pushed many expenses skyward, increasing corporate insurance expenses, utilities, supplies contracted services (Police) and wages.  AS a result, the Consolidated Department Operating budget rose by 6.8%, or $406,641. Rental revenue losses and additional operating expenses attributed to Covid totaling $115,283 were partially offset by provincial funding of $43,000.  Despite this pressure, there was a surplus of roughly $224,000 pending year-end audit and reconciliation available at the time of the last budget meeting, which will be applied to current operating expenses.

On the capital side, the budget includes $7.4 million in capital expenditures.  More than half of this will be funded by capital roll overs from previous years as well as draws from specific reserves, bringing the net spend of $3.6 million which will be covered through the tax levy.  Of this, $2.4 million is not actually spending but an allocation the township’s Asset Replacement Reserves.  Two major capital projects – the Fire Hall and the new Public Works Operations Centre – had minimal impact on the current budget as the township investigates their eligibility for Development Charges funding.   The actual costs for these projects have not yet been established, but debenture payments of $67,340 are included in this budget to recognize the possibility of these projects beginning during this fiscal year.

On the revenue side, new builds valued at $58 million are forecast to add roughly $340K in tax revenue.  This increase in assessment values raises the amount generated by a 1% residential tax rate increase to $102K, an increase of $6,300 from last year.

On the asset side, the township holds roughly $40 million in reserves.  Of this total, $21 million came from development charges and can be spent on growth-related infrastructure expenditures such as water and wastewater services, roads, fire and police protection services and recreational opportunities including parks and libraries.  Another $17.8 million is accumulating in reserves dedicated to specific expenditures, including $3 million for the new fire hall and emergency equipment.  Asset replacement reserves total $10.5 million at the end of 2021.  The objective in building this particular reserve is to ensure the sustainability of municipal infrastructure. The Finance department has encouraged the township to increase its annual contributions to this fund, which in theory should equal the annual depreciation expense every year.  Contributions over the last ten years have represented 72% of the audited depreciation values over that period.  In 2022, the asset replacement reserve allocation represented 94% of the estimated depreciation expense for the year, bringing the fund a bit closer to this target.

For ratepayers, this means that the municipal portion of the property tax bill will total $704.76 per $100,000 of assessed value.

Peterborough County also passed its budget last month, incorporating a 2.6% increase in the County tax levy.  KG

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