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Budget talks begin with $81 tax increase for average homeowner

January 11, 2019   ·   0 Comments

By Brock Weir

Council is set to begin budget deliberations this Thursday with a starting point tax increase of 2.58 per cent on the municipal portion of the tax bill, or, when combined with a 2 per cent tax increase at the county level and a zero-point change on the education front, will result in a combined tax increase of 1.96 per cent per New Tecumseth homeowner.

“The past several years have seen significant assessment growth opportunities which has contributed greatly to funding the many servicing requirements and initiatives undertaken by the Town,” reads the draft of the Budget, which is set to be presented to Committee of the Whole on Thursday morning. “However, the impact from the economy on local construction has reduced our 2018 actual construction permit and application fees, which have decreased the Fees & Charges Revenue by $830,000. We have offset this reduction to $377,000 by proposing new strategies to promote our services and increase attendance and usage at our facilities by $120,000. We have also budgeted a $265,000 increase in penalty and interest revenue to reflect slight increases in rates and actual cash balances.

“The change in Reserve funding is primarily the result of drawing $400,000 from the building department’s Bill 124 reserve to offset expenses. The reserve was created from the previous year’s surpluses generated from unprecedented volume and growth. Other significant draws from reserves include Public Works tree program [at] $245,000 and the Police Services Board

[at]

$65,000.”

Additional factors going into the 2019 budget include a hit of $400,000 attributable for a cost of living increase when it comes to municipal staff.

“Staffing resources were diligently scrutinized through this year’s business planning efforts,” says the Draft.

The budget includes debentured financing for a number of community projects, including the Tottenham Library, which is eligible to be funded by development charge (DC) reserves, along with Fire Station #4. It estimates the total construction cost of Fire Station #4 will clock in at $6,8 million, while the Tottenham Library costs will hit $2.795 million.

“The Town Administration Centre project will span multiple years,” the Draft notes. “Within the 2019 Budget is funding allocation for the second year construction, totalling $8.082 million. This is an increase over the 2018 Budget Forecast due to the US Government’s imposed tariffs on construction-specific products, such as steel and aluminum. The current and prior budgets for the Town Administration Building total is $16.8 million of which $10.3 million or 60 per cent will be debenture financed. While debenture debt will be required for this project, the actual issuance of debenture will not occur until the project is substantially complete. Any funding shortfall during the construction phase will be covered by a short-term bank or construction loan.

“The town’s total outstanding debt as of December 31, 2018 is estimated to be $67.8 million. The debt is being retired over a variety of yearly terms and interest rates. The total outstanding debt will be funded by development charges of $55.5 million (80 per cent) and taxation of $13.3 million (20 per cent). The 2019 proposed debt funding will increase this balance over the next two years depending on construction timing by $21.8 million, less regular principle payments of $5 million per year. Outstanding debt in 2019 is estimated to be $66 million and [$82 million] in 2020.”

After Thursday’s presentation to the Committee of the Whole, the budget is expected to be back in focus at another Committee meeting on January 17. From here, local lawmakers will make Council recommendations before a public information session is held on January 31 to get budget feedback. If this schedule goes according to plan, the budget will be approved at a special Council meeting slated for February 11.

“The 2019 Budget is one element of New Tecumseth’s commitment to Business Planning which aligns the department’s resources requirements to the Town’s Strategic Plan,” said Lori Bedford, General Manager of Corporate Services/CFO for the Town of New Tecumseth. “Early in the budget preparation Senior Management met to discuss their proposed 2019 initiatives. This provided an opportunity to discuss the resources required to successfully accomplish these targets, identify interdepartmental pressures and contemplate the requirements to complete all projects by year end.

“The proposed New Tecumseth 2019 Budget has a Net Operating and Capital Levy of $34.9M which results in a 2.58% increase. This translates to an increase of $57 per average household prior to the impact of the County and Education Board. The 2019 Budget is a commitment to the new Council and residents to optimize resources, review processes and consult on future changes to desired service levels while continuing to invest in new and rehabilitated assets to provide community service and enjoyment.”



         


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