Thursday, October 30, 2014

Council opts to dip into reserves

Town council has made its final revisions to the 2014 budget and while the bottom line to the taxpayer will be as minimal as possible, council won’t be contributing as much to its reserves this year as it would have liked.
Normally the budget would have been passed by now. But changes in the assessment to the recently-closed Resolute Forest Products mill property forced council and administration to take a close second look at it.

This included having to include a vacancy rebate to Resolute for $694,960—$498,662 more than previously expected—in the budget, as well as making other changes to balance out the resulting shortfall while not affecting tax rates.
These included putting $415,000 less into reserves this year ($1,335,000 instead of $1,750,000).
At a budget meeting here Monday, several members of administration and council agreed they were pleased they could mitigate the impact on the taxpayer.
But they lamented having to dip into their “rainy day money.”
“The budget doesn’t look very much different than it did before but we’re not putting money in the bank that we’re going to find next year or the year after,” said Coun. Ken Perry.
“We’re putting a little bit of a Band-Aid on it,” noted Fort Frances CAO Mark McCaig.
“We’re using some of our money because [of] circumstances well beyond our control.
“It’s nothing administration likes to do; I know you guys don’t like to do it, either, because that’s not the way we do business,” McCaig added.
“It’s a false fix in a lot of ways because it doesn’t have a life.
“Changes to service or reductions in operation—they have a life for forever,” McCaig explained. “Tax increases—they have a life forever.
“This is a Band-Aid,” he reiterated.
“But extraordinary circumstances call for extraordinary measures, and that’s where we are this year.”
With the town having a backlog of infrastructure and equipment that needs to be replaced, the current council has been trying to put away more money for the future with each budget.
In 2012, council set aside $750,000 to put into reserves.
Last year, however, it was unable to any money into reserve after having to pay back $1.7 million to Resolute.
McCaig warned council this year is a one-time fix—and they can’t do it in future.
“You have to do something different,” he remarked.
“You have to do something lasting—whether it’s increase your revenue or decrease your costs.”
“We had to come up with a solution this year, a bandage solution,” agreed Mayor Roy Avis.
“But going forward, we’re hoping to come up with a better solution,” he added.
Tax rates
The budget will be fully explained to the public during the June 9 council meeting, at which time it is expected to be passed.
As reported last month, the municipal tax rate for residential will increase 1.034 percent.
But when the reduction in the education rate is factored in, the overall tax rate increase is .4391 percent—less than a half-a-percent.
Of the 3,073 residential properties to see a tax increase, the majority (2,100) will go up an average of $43.
A total of 696 will go up from $100-$200, 182 will go up $200-$300, 93 will go up $300-$500, two will increase by $500-$700, and one will go up $722.
Overall, the town will be collecting $263,473 more in residential taxes than last year—a 3.7 percent change.
As always, exactly how much one pays depends if someone’s assessment has stayed the same as last year.
If someone’s assessment went up 10 percent, they’re going to see a higher hike.
Multi-residential, meanwhile, will increase by 0.787 percent, with taxes going up an average of $318, while commercial (occupied) will go down .1273 percent.
This means that 105 commercial properties’ taxes will go down $415.
Due to assessment changes, the balance of 259 commercial properties will go up an average of $389.
But just like with residential, this amount is an average of increases, ranging from less than $100 for 60 commercial properties to more than $3,000 for one.
The 2014 operating budget is balanced at $22,244.645, with a capital budget of $6.2 million and water and sewer budget of $4.7 million.

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