As town council and administration get ready to begin their bi-weekly budget meetings next Monday, it's already looks like there will be some challenges ahead.
Council received the preliminary 2019 operating and capital budgets at its regular meeting Monday night, with the former indicating a $813,872 shortfall.
In a report from treasurer Dawn Galusha, she noted the two major components—both of which are out of the town's control—that account for 69.3 percent of this shortfall are an OPP contract increase of $396,805 and an estimated reduction in Ontario Municipal Partnership Fund (OMPF) dollars to the tune of $167,105.
OMPF funding is the province's main annual transfer payment to municipalities. It is meant to assist municipalities with their social program costs, support areas with limited property assessment, and generally address challenges faced by northern and rural communities.
Fort Frances CAO Doug Brown said the town is not alone in facing changes to their OMPF funding and OPP costs.
“We are probably no different than a lot of municipalities," he remarked. ”We have a big deficit but we've gone through it in the past.
“We've got to the work together," Brown stressed. ”The community is going to have to realize we really don't have a lot of options either way.
“We raise taxes or we do a combination of cutting service and expenditures, or we cut services directly,” he warned.
“We're no different than any other community at this point.”
But Brown also said the preliminary budget is just the start of the process.
“This is the first round," he reasoned. ”I can look around and I see everyone in administration is really happy to be sitting here, starting to think about how they're going to whittle it down to something that's manageable.
“It's our role,” Brown concluded.
The operating budget also includes a list of proposed staffing changes (which may or may not survive the budget process), including:
- the addition of one full-time Public Works labourer and one seasonal labourer to address changes to the Minimum Maintenance Standards on town properties;
- one more student labourer in Parks and Cemeteries;
- an additional maintenance attendant at the Memorial Sports Centre for ice season (October-March);
- 20 hours per week of extra time for caretakers at town facilities;
- 250 additional hours of staffing in the summer at the Sorting Gap Marina due to increased traffic;
- an information technology intern (partially paid for with a grant);
- a museum assistant as the current intern will be done in March (no intern position will be hired this year and two student positions at the museum will be removed to help pay for the assistant); and
- increased lifeguard time at the Memorial Sports Centre.
The preliminary capital budget, meanwhile, is sitting at $15,030,212.
In her report, Galusha noted the items in the capital budget have not yet been ranked as “high," "medium," or "low” priority, and there are roads projects currently in the budget which only will proceed contingent on government funding.
On a positive note, Galusha indicated the town is in the third year of a four-year cycle for property assessment phase-ins.
This means additional assessment is added to the taxation roll, which may provide for additional taxation revenue.
For example, if the 2018 municipal tax were applied to the 2019 assessment, it could realize roughly $143,000 in additional tax revenue, she explained.
Interim tax levy
As council rolls up its sleeves to dig into the 2019 budget, it passed a bylaw Monday night to institute an interim tax levy.
As in previous years, the interim levy is equal to about half of the total amount of taxes property owners paid in 2018.
Interim tax levies are a means to secure revenue to keep operating while council determines the final tax rates for 2019.
Implementing interim tax levies is a common practice each January, and is permissible under the Municipal Act.
Interim tax bills will be mailed out shortly, with 50 percent of the levy due by Feb. 28 and the balance due by March 29.
Council also passed a bylaw to authorize temporary borrowing in the amount of $4 million to meet 2019 expenditures (this also is normal procedure until tax revenues are collected for this year).