Budget needs $2M cut for ideal number

January 14, 2015   ·   0 Comments

The 10.9 per cent increase in the draft Dufferin County budget provides an interesting task for County Council in its bid to hammer out a more acceptable total. According to the County Treasurer Alan Selby, the budget would have to be reduced by about $2 million for it to reach an ideal number.

The situation isn’t hopeless, but some of the options could leave taxpayers facing more issues in the coming years.

There are a number of key issues within the operating costs for 2015 that have pushed  the number so high, but the report from staff also indicated that the higher budget could make way for much lower increases in 2016-2018.

Key drivers in this increase include a $1.5 million increase in public works, along with $1.3 million for items like service delivery, facilities costs, administration and office, and several others.

“The numbers we have for the next few years are an indication that it might be all right to do certain band-aid solutions to 2015,” explained Mr. Selby. “This will create a larger problem for 2016, but with such a big difference, we might want to smooth out this increase between the two years instead of looking at one large increase.”

The draft budget, as presented to council last Thursday, currently sits at $34.2 million, up $3.3 million from 2014, which is equal to a 10.9 percent increase.

“We seem to start around 8-10 percent each year at the beginning of the process,” said Mr. Selby, explaining that from there, they usually work it down to a more respectable number. “However, what’s different this year is the increase comes half from the operating budget, and half from capital expenditures. Usually we sway more to the capital side, but not this year.”

The final county tax levy increase in 2014 came down to 3.4 percent, meaning the net increase per taxpayer was only 1.74 percent of the total for property owners which included local and education levies, or about $22 for the year for the average resident. With the draft budget, the proposed increase for 2015 would cost taxpayers an increase of 8.51 percent, equal to an additional $113.73 per household for the year.

Some of the options County Council has to try to reduce the budget for 2015 were outlined by Mr. Selby at Thursday’s meeting, and included suggestions such as postponing various capital projects from 2015 to years beyond, and taking more funds from County Reserves to help offset costs for 2015.

The issue with those two possibilities is that the cost of the projects would be carried over to future years, and many of the projects have already been postponed for several years. For County Reserves, it would lower the amount of reserves available for 2016.

“Part of the reason we’re seeing such a big increase in capital is that there is a backlog of work that has created a problem for 2015,” said Mr. Selby. “We haven’t been increasing the amount of work done for roads and bridges over the last five years. We’re trying to get caught up.”

Another option would be to look at decreasing the budget by 1 percent through finding some ‘in-year savings’. This portion would consist of staff looking into areas where different costs could be cut throughout the year to generate an approximate $300,000 in savings from the tax levy increase.

“It would make the chance of having a surplus at the end of 2015 much lower, but the chance of breaking even much higher,” said Mr. Selby.

The final two options suggested at the meeting included removing proposed 2015 service enhancements and creating service cuts to operations, but the latter would negatively impact services to the public and affect staffing.

Another factor in the current high increase is waste management, a proposed 13.3 percent increase over 2014 which Mr. Selby says would be very hard to reduce. While in 2014, the County paid Green For Life $3.6 million, the forecast cost for 2015 is $4.1 million.

The increase is attributed not just to annual inflation and fuel adjustments, but to growth in the number of houses serviced by GFL.

Budget review and discussions will be held in January and February, with a public input session incorporated into the February council meeting. The goal will be to pass a budget bylaw in March with the actual numbers for the year.

“Once you get beyond March you’re going to cause financial problems with tendering, because until we approve a budget, no capital projects are approved,” warned Mr. Selby. “We can’t tender them until we know what’s going forward and get it approved.”

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