Blue Mountain Ratepayers' Association

TOWN BUDGET 2016

TOWN BUDGET 2016

The Town of the Blue Mountains recently underwent an audit that revealed our books are in good shape and we are the envy of most provincial municipalities. In 2016 our municipal taxes will be going up a small amount; however, higher costs at Grey County will likely force up taxes more dramatically in 2017 and beyond. That is the main message the Ratepayers’ Association presented on Wednesday, February 17, 2016 at the Public Information Centre and Public Meeting on the 2016 Draft Budget and 2016 Draft Water and Wastewater Budget and Rates. Brian Harkness represented BMRA Budget Review Committee Chair Terry Thompson and spoke to the attached submission given to the Town Clerk.

After a presentation by Director of Finance Ruth Prince, calling for a blended increase in 2016 of 1.79%, Brian set the tone with something BMRA and TBM Council all agree upon: the historical arrangement with the County is “unsustainable” and our taxes will likely be blended up, instead of down (as in the past) by forthcoming County expenditures.

Although the blended tax increase is proposed to be 1.79%, Brian noted that costs at The Blue Mountains are increasing by 8.4%.  The Town spent $13.0 million in 2015 (although it collected $13.5 million) and wants $14.1 million for 2016, an increase of $1.1 million or 8.4%.  This percentage is the result of using actual expensed numbers rather than comparing budget to budget numbers. Council has asked staff to review this method for the preparation of the 2017 budget.

A 2016 Town budget item that is new has the BMRA concerned in the form of an additional 2% proposed charge for capital reserves. The 2% can be viewed as surtax being added on top of current taxation and is being voted on at another council meeting. The proposed 2% Capital levy is included in the proposed 1.79% blended rate and not in addition to. During the presentation BMRA asked that the 2% capital replacement levy not be on the tax rolls this year. We have a 2015 surplus, so this should be used to fund the reserve. Councillor Halos remarked that if the levy is approved, he would be asking that a portion of the 2015 surplus be allocated to it.

A second position the BMRA took is that before a future levy is introduced, the entire concept should be brought forward as a package, including the financial controls so the fund is locked away for safe keeping. The concern is that funds such as these will get raided in the future as the capital reserves grow, unless controls and legislation come with the package. We have seen raiding occur with wastewater reserves, it can happen here too.  Bottom line: the Town must make sure we get legislated control around reserves to ensure the capital replacement reserve gets funded in a transparent and accountable manner.

The BMRA has learned from discussions with the CAO Troy Speck, as well as the Director of Finance Ruth Prince and Manager of Accounting and Budgets Sam Dinsmore, that the 2% proposed levy is a drop in the bucket; more has to come. The Linear Asset Management plan completed by Hemsen Consulting calls for $7.5 million in capital expenditures for 2016 and the Town is planning to only spend $2.5 million, mostly on roads. The Linear Asset Management Plan identifies the linear asset inventory and the replacement costs, timing and required funding.  So the 2% in addition to that is only a tiny top up of $271,000 as the Town continues to work towards closing the gap.  Having said all that: At this time the BRC is unable to support these numbers without further analysis of the Hemson Asset Management Plan presentation. Again we trust our good relationship with Ruth Prince will help us get to the bottom of that and you can look forward to a “riveting” eBlast in March on that subject.

The much larger issue is where we are going in 2017 and beyond, given the growth and replacement capital requirements plus the new Asset Management System that will call for more and more reserves. TBM is much healthier than a lot of other municipalities which have been downright negligent in salting away reserves. It is ironic that The Blue Mountains has favourable economic conditions such that we are ranked near the bottom for grant applications from the Federal and Provincial governments.  The Town continues to ask for change in the allocation of grant funding to municipalities.

But here is the point that Brian drove home: that ratepayers in TBM are very fortunate to have solid books, plus a staff and Council we can work with. So that is half the battle. The other half of the battle is the County.

Brian made it clear in his remarks that BMRA wants to help our County representatives, Mayor McKean and Deputy Ardiel, with their struggle to get us a better deal. The Deputy commented that “…we are lonely soldiers up there and we did not get support regarding the very expensive reno of the County building (that the Mayor says will add 1.5% to County taxes every year over the next 15 years) plus the looming expenditures of a similar amount up there for long term care facility Rockland Terrace”.

Our current governance structure with the County is a reality that we have to live with until we find a better deal. Meanwhile our Council and BMRA should push to get the County Council to find corresponding cost reductions to offset the reno and the upcoming retirement home expenditures. You would think that the other 8 municipalities in the County would get behind that.

Meanwhile in closing: don’t forget to renew your BMRA membership. These eBlasts and the volunteer time that goes into attending committee and council meetings are free, but web maintenance, mailings and Candidate Town Hall meetings are not free. We need your financial support, so please renew and try to get a friend to join.