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Mono Council debates tax rate increase for local residents

November 20, 2020   ·   0 Comments

By Peter Richardson

It is budget time again and Mono Council had their first look at the draft budget on Nov. 10. 

In it’s first presentation, the budget showed a deficit of a little under $1.1 million, to be made up if Council was to achieve their proposed levy increase of only 1 percent, or the rate of inflation. With several Dufferin communities accepting a greater increase, Mono expected to minimize their tax increase to only 1 percent. Although this was perhaps an unrealistic  expectation, it was the aim of council members. 

Town Treasurer Les Halucha presented his numbers to Council last week and valued a 1 percent increase at around $80,000. His figures indicated that the $1.1 million figure would have to be decreased to zero in order to allow for only a 1 percent increases in taxes for the town portion, before the County and school board portions were factored in. Keeping in mind that taxes must rise by at last the annual rate of inflation, in order to not backslide, this was a tall order.

The distribution of the taxes was shown in a pie chart by the treasurer . Fully 51,7 percent went towards transportation costs, which included the upkeep of the Town’s roads. 19,22 percent went to protection services, notably fire and police, 13.16 percent to general government, 11.04 percent to recreation, .71 percent to other and 4.8 percent to planning and development. To maintain the 1 percent increase, would be “problematic” said the treasure , as Orangeville Fire Services costs were projected to increase by 4 percent, and the Credit Valley Conservation Authority was expected to increase well above the 1 percent inflation rate. 

In addition, there was 20 percent of the budget that Council, essentially, had no control over. With growth projected to be only .5 percent for 2021, the treasurer outlined the ways in which Council could proceed. 

Firstly, they could accept an inflation rate of 2 percent, which would leave less to cut from the budget. Secondly, would be to phase in or eliminate capital projects financed by the tax levy. This was not recommended by the treasurer. The third option was to reduce or phase in contributions to reserves. Fourthly, would be to use purposed reserves to fund construction and finally, to add the $1.1 million to the tax levy, which would result in a tax increase of 13.6 percent for 2021.

Overall, it was not a pretty picture. Between the added COVID-19 expenditures and income loses, the 2021 Budget was not an optimistic document. Th projected surplus for 2021 was less than $10,000, compared to the over $200,000 surplus for 2020. Projected income was in the minus, for a total of -$25,169 and most other costs were rising either due to COVID-19 or to inflation. 

Council was left with few options at their disposal. Going through the different departments, members questioned numerous expenditures. One of these was the relocation and replacement of the Public Works department fuel tanks. The intention was to have the underground tanks placed above ground and replace the pumping system. The rationale was that the tanks were approaching the end of their life expectancy and that a potential leak would be both an environmental and operational disaster. The fuel tanks were used daily and the environmental risks were not worth contemplating. 

Nevertheless, Council questioned the process in light of the positive test results and the economic impact of replacement. Matt Donor, the operations manager explained that the transfer pipes between the tanks and the pumps were one of the major concerns, since a failure there would result in both environmental damage and the shut down of the Public Works department’s fuel supply. The proposed solution, by the treasurer, was that the replacement tanks could possibly be funded from the an efficiency grant received from the provincial government. He stated that the project would fall within the guidelines of the grant and that the money was sitting there available to Council.

When looking at other works projects, Coun. Fred Nix proposed that rather than adding $100,000 to the Blind Line road upgrade reserves, that Council eliminate the increase and instead allocate the entire reserve to funding the deficit. Although this goes against general provincial government thinking, regarding reserves and their maintenance, Council agreed with the proposal. 

Moving forward in the budget, Deputy Mayor John Creelman asked recreation manager Kim Heaton if the Town should not be making an event out of Community Clean Up Day. Her reply was that although one group of residents did come together annually to clean up their neighbourhood, there was generally no uptake to do this town wide. Deputy Mayor Creelman countered that due to COVID-19 and the increase in the community of walking and related activities, that it should be considered as he believed there would be an uptake now. 

At this point, Coun. Nix suggested that perhaps now was the time for Council to consider taking out a loan to cover some of these capital expenses, such as the new grader, His rationale being that interest rates were at an all time low and it was a good time to borrow, especially since Council had now reduced the deficit to a much lower figure by reallocating reserves to the deficit. Coun. Ralph Manktelow opposed this approach stating that it was better to utilize further reserves than to borrow money, since not only the interest but a portion of the principal would have to be repaid annually and that would likely amount to $100,000 or more and the town would be paying more than the value of the purchase. 

After looking at certain other possibly delayable projects and reallocating  further reserves, Council reduced the deficit to slightly over $44,000, at which point Coun. Nix suggested that since 1 percent equalled $80,333, by increasing the levy by 1.5 percent, this would leave Council at the desired 1 percent levy increase. 

Deputy Mayor Creelman however, did not agree. He felt that he would not go beyond the 1 percent levy increase and that the draft should be returned to staff, with the instructions to find a way to reduce the deficit by the remaining $44,000. 

Council agreed to this and the draft was returned to staff with that instruction. The budget proposal will return to council at the Nov. 17 meeting for final discussion and approval.



         

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