The first draft budget outlined in Director of Finance Kimberley Pope’s December presentation was unique in several ways. First, the Operations Budget showed just a 0.1% increase over that of 2020, which is good news. Last year that section showed an increase of 15.9% over the previous year. Second, because the scheduled MPAC property reassessment did not occur last year, the tax levy relies on last year’s market assessment, so there is no impact on tax rate calculations attributable to changes in market values. The budget starts with the inclusion of $142,940 in new tax revenue from new building that has come on stream. This number will continue to rise next year with the completion of more new builds.
Given the stability of the operating side of the budget, the main financial pressure in this presentation stems from the proposed capital spending. The document outlines a total capital expenditure ask of $9.4 million, of which have funds earmarked through earlier decisions, reserve funding and allocated capital costs included in previous tax levy rates. This is $3.1 million higher than the amount requested in the initial 2020 capital budget. The net capital requests for which there is no funding in the current tax rate is $2,030,000.
A one percent increase in the tax levy generates an additional $95,700 in revenue. This means that fulfilling all of the capital requests, tax rates would have to rise by 20.9%. This will not happen.
Among the significant items in the capital requests are $1.2 million for the first half of the Cavan Yard Works rebuild $118K for culverts, and $1,577,500 for the Fire Department, of which $1million is a contribution to a reserve for a new Fire Hall, and the final payment of $194,000 for the Millbrook Dam project. There is also a $1,661,800 contribution to the Asset Management Reserve Fund for municipal infrastructure. This is a mandatory allocation.
There are difficult decisions ahead. Council could choose to chip away at the capital spending deficit by cutting smaller projects, but there are big capital projects that will need to be addressed in the near future, not the least of which is a new Fire Hall. Do we have any volunteers to organize a fundraising campaign for that project?
There are two virtual budget meetings scheduled for January 21st which residents are invited to watch on youtube. Those who wish to comment during the Public Session which begins at 6pm are asked to contact Township Clerk, Elana Arthurs, to obtain the information required to participate. KG