June 9, 2011
Townships explain
budget hike
by Kay McQuade
All five members of Head, Clara, Maria council were back at the council
table last Friday ready to face the task of managing the township after
the disruptive and divisive events of the past two months.
As part of the regular council meeting, a public meeting was held to
provide interested ratepayers with the opportunity to learn more about
the budget process and ask questions about the budget that was passed
by council in March by a vote of 3-2.
Clerk Melinda Reith said one of the reasons for the meeting was to
address ratepayer concerns about the double digit residential tax
increase as compared to the rates of neighbouring municipalities.
Councillor Jim Gibson said he had received a number of irate calls from
residents about the tax increase and questions about the amount being
put into reserves.
Nine ratepayers were in attendance to listen to Reith’s presentation on
the budget and explain why the 2011 tax increase was 18%.
Reith stated “HCM has an annual budget of $1 million, Laurentian Hills,
$5.7 million and Deep River $7.4 million, so a 10% increase of the
smaller amount is a lot less than the same percentage increase of the
larger amount.”
“Comparing percentages does not give an accurate picture.”
“Our taxes are the lowest in the county,” she said.
“Deep River’s are the highest with Laurentian Hills somewhere in
between. You cannot compare our percentage tax increase to other area
municipalities because all things are not equal; assessments, rates,
ratios or classes.”
Reith stated that the most accurate comparison of taxes comes from
examining the residential tax rate, which is then expressed as the
amount of tax paid on a property valued at $100,000.
A property valued at $100,000 would have taxes of $221 in HCM, $749 in
Laurentian Hills and $1,027 in Deep River.
Reith said the 18% tax increase quoted was a year over year increase of
HCM’s rate using 2010 data in the residential class only to raise the
funds required for HCM purposes.
It is not the final increase to anyone’s tax rate.
Specifically, on the revenue side, Reith noted that “the Ontario
Municipal Partnership funding has decreased by $17,500 for 2011 and the
amount received from the fund changes year by year. The Railway Right
of Way will decrease by $5,000 and recycling revenues are down by
$4,000.”
Expenses are up with council honourariums expected to increase by
$5,000 and an increase in staff salaries of nearly $27,000, in part to
compensate staff for lower than fair compensation over the past number
of years.
Reith noted that “staff are the lowest paid in the area and within
comparable sized municipalities.”
Waste management costs are up $40,000 and police costs are expected to
increase $7,000 over 2010 numbers.
Council noted that all municipalities in Ontario are required by law to
provide certain services even if they don’t make sense for extremely
small municipalities.
“The few discretionary services that council does provide include the
boat launches, parks, recreational facilities and the library,” a
report prepared by the clerk noted.
“Most other expenditures are required to provide legislated functions
and to administer those programs.”
Councillor Dave Foote clarified that the “18% increase is only on 15%
of the total tax bill.”
When county and education rates are taken into consideration, the final
residential tax increase for HCM is 7.8%.
Laurentian Hills passed its budget in May with no increase in the
municipal portion of the residential tax rate.
Deep River has not completed its 2011 budget but is aiming for a zero
tax increase overall, which means their 2011 residential tax rate will
actually decrease compared to the 2010 rate.
During the budget process back in March, staff presented three options
for council to consider.
The difference in the three options was the amount placed in reserves.
Option #1 with a residential tax increase of 7.3% allowed for minimal
reserves, option #2 with 12.88% increase made provision for an
additional $20,000 to be added to reserves, and option #3, 18.47%
increase which council ultimately accepted, adding an extra $40,000 to
reserves.
In 2010 HCM had reserves of $584,208, and following the 2011 budget
will end up with a total $646,098 in the reserve fund.
The target balance for reserves was set at $847,660.
Councillor Jim Gibson was passionate about building up the reserves. He
said “reserves are a shock absorber.”
He pledged that “HCM will never borrow money while I am on this
council.”
Councillor Dave Foote concurred, saying “reserves equate to a savings
account.”
Those in attendance seemed satisfied with the explanations provided by
council and the clerk.
It was suggested that council hold open meetings or an open portion of
a regular council meeting when sensitive issues come up to allow
ratepayers the chance to freely ask questions and obtain clarification.
Council unanimously agreed and indicated they would plan to include
more open sessions.
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