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Shrunken reserves could lead to 4.2% town tax increase

March 4, 2015   ·   0 Comments

A narrowly approved decision Monday night to boost the Town’s depleted Reserve Account by $1 million could see Orangeville taxpayers facing a tax hike of 4.21 per cent, or more than $100 on a home assessed at the median figure of $313,701.

The 4-3 decision by town councillors, sitting as the Committee of Finance and Administration, came during discussion of the 2015 capital budget.

The sharp tax increase will take place unless Monday’s decision is modified or council succeeds in cutting the Town’s operating budget.

Just when that might happen is uncertain, but the budget talks may resume after next Monday’s scheduled council meeting.

A motion to add $1 million to the Town’s Reserve Account was made by Councillor Sylvia Bradley and supported by Deputy Mayor Warren Maycock and Councillors Gail Campbell and Scott Wilson. Mayor Jeremy Williams and Councillors Nick Garisto and Don Kidd were opposed, contending that the town’s poorer residents cannot afford such a tax hike.

The Bradley motion, along with many other decisions made by the committee that evening, left many members of the gallery scratching their heads in confusion.

One such issue was the Committee’s decision to provide an additional $42,000 to the Credit Valley Explorer (CVE) for additional parking and platform space after approving another $42,000 as an annual grant for the popular tour train service.

During the same discussion, Council denied $43,000 a requested operational enhancement in the form of $43,663 this year and $47,104 in 2016 for appointment of a Fire Prevention Officer to help the Orangeville Fire Department meet new standards set out by the Province more quickly and efficiently.

Recently, the fire department was told it was not compliant with provincial legislation regarding fire code inspections related to group homes, and that they must make changes to meet the regulations immediately.

The Fire Prevention Officer position is one Chief Andy Macintosh has been requesting for a number of years, and could have helped prevent this current situation, as well  remedy it more quickly.

The reason for the large tax increase lies with the Town’s Reserves account, which had been severely depleted by previous councils.

This not only puts the 2015 budget at a higher increase than the 3.33 per cent needed in the staff-drafted budget in early January, but also at a much higher tax rate increase than any other municipality in Dufferin, as well as higher than the proposed County increase.

Councillor Bradley said the Town’s reserves have been depleted so much that there is the possibility we are now sitting at the lowest level of reserves in the province.

“We’re currently sitting at about $5.8 million in reserves,” she said. “We should be at around $24 million. We’re at about four times less than what we should be. We have a big hill to climb just to get there. Many of [the other municipalities] have reserves of more than 60 percent [of their tax levies]. We are one of the lowest, if not the lowest in Ontario.”

Mono Treasurer Les Halucha told the Citizen Wednesday that the town’s current reserves of $6.3 million are “close to 100 per cent” of the $6.4 million tax levy recently approved for 201.

During the evening’s four hour long meeting, the Committee frequently separated multiple items from single recommendations to vote on them individually, except when it came to the proponents of the amounts to put towards reserves. Combined, the amounts recommended to add to the budget to be placed into reserves was over $1 million.

Several residents spoke out at the meeting against this action, advising that with the many lower and moderate-income residents in town, especially those on small fixed incomes, taxpayers could not afford such a large increase, and begged council to reconsider.

“I’m disabled and looking after an elderly father,” said James Jackson. “If you increase taxes, I could lose my house. You have to take into consideration, there are seniors, there are young people, and there are people moving from the city who are paying more in property taxes than they were before. The way this is coming across is you just want to pad your pockets.”

Mayor Williams spoke against the motion, also advising that the Committee needs to take into consideration that there are families who could not afford such a high increase in taxes.

“What we’re doing now with our reserves is really future taxation,” said Mayor Williams. “We’re spending it now, because we may need it in the future. I support having reserves, but not at any additional cost. It’s going to impact the taxes substantially.”

He added that if it was possible to increase the amount going in by $1 million with only a small fraction of an impact on taxpayers, he would be all for it, but he couldn’t support it at the increase it would produce.

“I look around the chamber, and not wishing to comment on anyone in specific, but not everyone is as well to do as some around the table,” he said. “I don’t think some of us know what it’s like to be poor. Some people take months to save up an additional $100.”

Tempers quickly flared following that comment, as Councillor Bradley questioned why those members of Council who campaigned on a zero percent budget had not come to Council with any form of plan or solid recommendations to achieve that goal.

“A promise was made for zero percent increase, and I would expect that they would present to us a plan on how to get there,” she said. “But we didn’t see a plan, or a proposal. The only thing we saw was that it was expected that Council and staff would fulfill that promise. We could do zero, we could give money back, but that’s not financially responsible. It’s been said this is a divisive council, and you’re right, we are. We don’t have a cohesive plan for what council would like to do.”

However, Mayor Williams contended the suggestions he had put forward at previous meetings to take the budget down to a zero percent increase were more than adequate attempts at fulfilling his promise.

“If you haven’t seen anything it’s because you haven’t been paying attention,” he said. “I’ve proposed cuts and nobody is approving them. I have made suggestions but there’s no appetite for it. At the end of the day Orangeville elected each of us in the room, and I’ve stood my ground. [The taxes] have gone too high too quickly. If at some point we don’t say enough is enough, we are going to keep perpetuating this increase.”

The vote was called shortly after, and the motion to increase the funds put into reserves passed.

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