Kincardine facing 10% tax-rate hike in 2017 to maintain services

Kincardine council has had its first look at the draft 2017 budget which estimates a tax-rate hike of almost 10 per cent in order to maintain existing service levels in the municipality.

Treasurer Roxana Baumann presented the document in committee-of-the-whole, Monday night (Dec. 12), noting that the draft budget consists of operating expenses of $26.23-million, including a lifecycle reserve fund contribution of $2.02-million. Taxation revenue of $15.6-million would be required to offset these operational costs.

The remaining $10.63-million in expenses is funded through a combination of grants and contributions, user fees and charges, interest and other non-tax revenues.

Meanwhile, the draft capital budget includes $14.123-million in high-priority projects, said Baumann. However, funding is available for only $9.421-million in spending. This includes potential grant funding of $2.879-million which may not necessarily be awarded, and therefore, the capital plan would need to be revised accordingly. The remaining $6.542-million would be funded out of reserve funds.

The capital budget includes 12 additional high-priority projects that are unfunded, amounting to $4.702-million, and 14 secondary-priority projects, totalling $1.75-million, that remain on the list for information purposes.

Baumann said the 2017 operating expenses are up slightly from the $25.1-million required this year.

“In 2016, the average Kincardine homeowner (with a home assessed at $244,000) paid $2,795 in total property taxes,” she said. Of that, $1,420 (51%) went to municipal purposes, while $915 (33%) went toward the Bruce County levy, and $460 (16%) to education taxes.

The municipal portion, said Baumann, was divided up, with $400 to public works (excluding water and wastewater services), $285 to parks and recreation, $265 to general government, $260 to fire and policing, and $210 to building and planning.

She said that a one-per-cent tax-rate increase equals $118,000 in added taxation revenue. That same one-per-cent increase equals $14 per year for the average residential household.

Baumann said there are some estimates and assumptions made in the 2017 budget:
 

• Fuel, propane and electricity costs are projected to increase by $65,000
• Salary and benefits have increased by 1.75 per cent based on the Tripartite Agreement. In total, salaries and benefits account for a $290,000 increase over the 2016 budget
  • Contractual and other obligations have added $165,000 to operating expenses, including:
  • $112,000 for physician recruitment incentive agreements
  • $27,000 in OPP contract costs
  • $15,000 for the annual insurance premium
  • $6,000 Saugeen Valley Conservation Authority (SVCA) levy
  • $5,000 for the Saugeen Mobility and Regional Transit (SMART) contract
  • Legal fees have increased by $625,000 due to funding the arbitration costs resulting from the termination of the Bruce Telecom sale. The total budget for legal fees is $825,000, which also includes the estimated costs to convert Bruce Telecom to a municipal service corporation
  • Water/wastewater, and building services have been assumed to be self-supporting (no tax impact). The cemetery budget does not currently reflect revenue-neutral operations; however, doing so would reduce the tax levy by $100,000
• Contributions to capital should increase by at least $390,000 (about 2.7 per cent tax-levy increase) to address the infrastructure deficit. The total contribution to the lifecycle reserve fund has been budgeted at $2.02-million, from $1.63-million in 2016
• User fee revenue has been increased by 1.5 per cent in accordance with the 2017 Rates & Fees Bylaw. New non-tax revenues of $65,000 have been added to the budget from the introduction of new 2017 administration fees
• Investment income of $800,000 from Bruce Telecom and $80,000 from Westario Power have been included in operating revenues. This income will offset the property tax levy increase required in order to contribute $2.02-million into the lifecycle reserve fund.
• Ontario Municipal Partnership Fund funding has increased by $83,300 (8.7 per cent) to $1,041,300, due to an increase in the Rural Communities Grant by $5-million for municipalities with higher levels of farmland

Baumann said the increased cost in legal fees from the aborted sale of Bruce Telecom, has had the biggest impact on the 2017 budget.

Deputy mayor Jacqueline Faubert asked if there is a benchmark for what percentage of municipal revenue should be taxation and what should be user fees.

“We have comparisons with other municipalities,” said Baumann, “which I can bring to council at the next budget meeting in January.”

“There must be a ceiling for user fees,” said Faubert.

Departmental budgets were then presented, including goals and objectives for 2017.

Chief administrative officer Murray Clarke stated the successes from this year were: hiring a new public works director, a successful physician recruitment program with another announcement expected soon, and good progress on economic development.

For 2017, these will continue, along with the recruitment and transition to a new CAO.

Clarke also pointed out that the federal environment minister has announced she will make a decision by August, 2017, about Ontario Power Generation (OPG)'s proposed Deep Geologic Repository (DGR) for low- and intermediate-level nuclear waste at the Bruce Nuclear site in Kincardine.

Clerk Donna MacDougall said her department includes tourism, preparation for the 2018 municipal election, arts, culture and heritage, and community grants. One goal for next year is to determine a location for the tourist information centre because the lease on the downtown site expires April 30, 2017.

Baumann said the treasury is pleased to have switched to the Electronic Funds Transfer (EFT) system which has reduced costs for processing payments. The next step is E-mail billing, she said.

Fire chief Kent Padfield said his department includes the Kincardine and Tiverton fire stations, the Mysis rescue boat, health and safety, and community emergency management. Some highlights for 2016 include hiring a new fire prevention officer, signing up five new volunteer firefighters, and participating in the Huron Resolve emergency management exercise in October.

Public works director Adam Weishar outlined the completion of several projects in 2016, including the municipal parking lot downtown, the leachate facility at the landfill site, and the water towers in Kincardine and Tiverton.

Faubert noted a line item for repairs to monuments in the cemeteries at a cost of $10,000.

“We are responsible for maintaining them,” said Weishar. “It's more of a safety and liability issue.”

He said design work at the landfill site will begin in 2017, with construction of the next cell in 2018, and that cell is expected to open in 2018-19. Also on the list of projects for next year, is the reconstruction of Walsh Street.

Recreation director Karen Kieffer said the highlights for 2016 included phragmites eradication, lifesaving equipment at the beach, and new playground structures at Macpherson Park and in Tiverton. For next year, it's more of the same, as well as such projects as a new community centre in Tiverton, Phase 3 at the arts centre in Kincardine, and refurbishment of the tennis courts.

Chief building official Michele Barr outlined various projects under way and more to come in 2017.

Councillor Randy Roppel asked how growth has been in the municipality.

Barr said 2016 saw new home starts nearly double.

Baumann said that the overall assessment value has decreased in Kincardine by about 2.3 per cent, beginning Jan. 1, 2017. If everything remained the same, there would be $25,000 less in tax revenue, she said.

Council also discussed some of its own objectives, such as the natural gas project, economic development, the DGR project, and physician recruitment and retention.

Faubert said one way to save municipal tax dollars would be to decrease the number of councillors by two, leaving a seven-member council.

“I would appreciate receiving a staff report on how to do that,” she said. “I'm not talking about getting rid of the ward system; perhaps we would reduce the number of councillors-at-large.”

“We could discuss that at a regular council meeting,” said mayor Anne Eadie. “The decision would have to be made by the end of the year preceding the election year – so by the end of 2017.”

The draft capital budget was discussed briefly, with the following projects included:
 

• $4,185,000 –Connaught Park Sewage Pumping Station
• $2,200,000 –Airport runway rehabilitation
• $670,000 –Walsh Street reconstruction
• $440,000 –Lighthouse Repairs
• $325,000 –Davidson Centre entranceway –Phase 1
• $200,000 –Kincardine Medical Clinic expansion
• $150,000 –Tennis Court resurfacing
• $100,000 –St. Albert Street sidewalks

Council was also told that a cost consultant has determined the estimated cost for a new Whitney Crawford Community Centre in Tiverton would be $6.2-million, including preparation work and the parking lot.

Faubert's motion, regarding festival funding, was again deferred to the next budget meeting Jan. 23, at 5 p.m., in the municipal administration centre.

Council thanked Baumann and her staff for a clear budget document. Further budget talks will take place next year.