Version 1.0 Draft 2018 Tax Supported Budget. 23 February 2018

Transcription

1 Version 1.0 Draft 2018 Tax Supported Budget Notes & Commentary 23 February 2018 KIRKLAND LAKE TWI IIIGNT (NVIRONMfNT 1 of 12

2 Quick Summary Starting Point is 24%: to keep same service levels as subtract between 8-12% awaiting negotiations to be finalized by April = Real starting point to work from is expected to be around 14%. 14% does NOT include: Any capital projects - that cannot be funded by the Federal Gas Tax*. Any expansion request. No money set aside into a reserve fund. *Note: The Feds allocate ~ $540,000 to TKL for gas tax eligible capital construction projects. 2 of 12

3 Historical Context Ten consecutive years of zero (0) property tax rate increases (no other Ontario municipality was found that had this policy) In 2017, property taxes were reduced a further (~10%) when wastewater was removed from the levy and placed on direct billing. Consumer Price Index (CPI) Inflation from was 18.05% - source Statistics Canada Municipal Price Index (MPI) Inflation from is estimated to be at least double CPI. MPI includes commodities not included in CPI such as electricity & fuel, arbitrated settlements, asphalt/concrete, and specialized equipment such as fire apparatus, sidewalk plows, ice-skating chillers, medical devices and etc. -source Municipal Finance Officers Association Town relied exclusively on assessment growth revenues over the past ten years to fund operating budget inflationary pressures on: wages, utilities, purchases & procurement Downloaded responsibilities & legislated requirements Expansion of municipal programs & services including Heritage North, Civic Park, Kinross Park, Splash pad 3 of 12

4 2018 Pressures Uncollectable taxes & loans were significantly under reported during this period and need to be corrected and written off. This is currently being negotiated and expected to be reduced. Commercial properties for the assessment years have recently gone thru being successfully appealed resulting in money we need to pay them back this year. This is province-wide. Waste collection legislative requirements will result in more than doubling of costs to provide same level of existing service going forward. 4 of 12

5 2018 Pressures New Aquatic Centre net operating increases & commencement of loan payments. It is anticipated that the provincial arbitrator will make a ruling on the 2013 Firefighters Agreement. This is the retro-payment. Budget corrections (mistakes that were made in 2017 budget) Inflationary increases (Combination of both CPI & MPI depending on item) 5 of 12

6 Capital Projects We have attempted to prepare a 5-year list of projects that require funding. Federal Gas Tax of ~$540,000 is allocated for construction projects, based on technical/engineering priorities. Do we increase taxes to fund other capital projects in 2018? (this will increase the tax rate) If so, how should we prioritize the list? Some health & safety items are significant and may result in work refusal. How do we develop a plan to start to tackle the large deficit? 6 of 12

7 Expansion List We have attempted to identify areas that are adding pressure to the municipality, from downloading costs, to enhancement of services. None of these are funded and adding any of them will increase the tax rate. How do you identify priorities? If not approved, how do we perform this work and comply with the regulations? 7 of 12

8 Reserve Funds The town currently has zero reserve funds saved up, and none available to use in the event of an emergency or to help offset/stabilize the tax rate. As 2018 is already a challenging year, it is recommended that we start planning for which year to start setting aside reserve funds. 2019, 2020 have more eligible tax rate room, based on the early forecasts however, these years also have significant capital projects. Is this a proper way of thinking or should we increase the 2018 tax rate to set money aside in a reserve fund? 8 of 12

9 Service Reductions & Wind Down Costs It is important to note, when making a proposed reduction, proper costs are included, such as: Employee severance packages Legal and contract obligations Building/site operational and maintenance issues Infrastructure transition and decommissioning and/or remediation Some of these costs are significant and the benefits will only be realized in 2019 or beyond not necessarily impacting the 2018 tax rate. 9 of 12

10 Long Range Planning 1. When looking at the whole picture, the base operating budget, the capital list and the expansion requests how do we plan for the next few years? 2. What needs to be done today, to help offset or ease the pressures next year, or 3, 5 years after that? (Think large costs associated with new fire hall, public works garage and other infrastructure that needs to be paid for). 3. How do we make the budget sustainable for a town with an 8,000 population? (KMPG compared us to: Dryden, Kapuskasing, Elliot Lake, Fort Francis & Temiskaming Shores ) 4. How do we make the budget attractive to provide reasons for people to live & set up businesses here? 5. How do we use our demographic trends in prioritizing the budget? 6. Should individual users be asked to pay more for specific services as opposed to property taxes subsidizing those services? If so, which services? and what percentage of the cost should the user pay? 7. What else should your municipality think about for future generations? 10 of 12

11 Comments/Suggestions Please fill out the form and submit to: All WRITTEN submissions will be included in the public records for Council to review. (Including your name and address information) s will NOT be replied to this is simply your comments/suggestions as is for Council to have. 11 of 12

12 THANK-YOU QUESTIONS? 12 of 12