BUDGET 2015 – MEETING NO. 1, MARCH 2

Budget 2015-001

There is no new tax level to give you after this meeting. The only things put back in were quite small amounts. There were a number of things that were discussed that might change that quite a bit in the meetings to follow, however.

Tonight was mostly an overview, and the view wasn’t good. For instance, all those industries we lost over the years cost us dearly. Thorold had fairly high industrial property taxes and now that they’re gone, it takes $2.53 of residential assessment to replace every $1 in industrial assessment. Our requirements haven’t changed – only the means of paying for it, meaning us. The result is that property taxes represent about 68.5% of the City’s capital budget.

It was pointed out that Thorold has competitive property taxes, sitting well below the regional average. Thorold’s property taxes come in at the eighth position, both in dollars per assessed value and as a percentage of household income.

Thorold has a $4.1 million asset renewal shortfall and present revenues cover neither amortization nor renewal costs. The City must cover those capital renewals within 10 years in order to qualify for future provincial grants. As well, the City’s user fees are losing ground at a steady rate and, at some date not, Council is going to have to review them. Just the City’s equipment replacement is underfunded by $326,000 per year, with the result that any large vehicle purchase will have to be done with debt-financing.

As for Thorold’s capital funding (money available to pay for existing capital debt plus the projects that will have to be undertaken to meet demands), there’s a gap of $42-$44 million over 10 years. And the amount of money Thorold is allowed to borrow isn’t enough to pay for it all with debt.

The Chief Financial Officer (CFO) pointed out that, should the present budget level for 2015 be adopted, future increase forecasts are as follows:

2016 – 11.4%

2017 – 8.8%

2018 – 8.5%

After the overview, Councillor Tim Whelan moved that, since there was as of yet no budget, they should approve at least the operations budget so that the City could function until the budget by-law is passed, possibly not until mid-April. That way Staff won’t need to be constantly running to Council for pre-approvals and overruns in the meantime just to do their jobs.

Both Councillors Sergio Paone and Shawn Wilson objected, asking how they would be able later to possibly cut money from the present operations budget if it had already been spent. Wilson added that he felt the move would just muddy the waters. As a result, the CFO suggested that they could pass ”no more than” 55% of the operational budget, so Whelan rephrased the motion, which passed with dissent from Paone and Wilson.

Councillor Fred Neale warned fellow Councillors that passing the 2015 budget as it stands will mean a much higher budget in 2016, since there will no longer be reserves to absorb the hit to the taxpayer.

On a question of debt by Councillor Whalen, the CFO noted that, with interest rates for debentures at an all-time low, Council might want to take the opportunity to move some of the internally financed debt into debentures, namely the debt for the Seniors Centre and City Hall.

Mayor Ted Luciani said that a chain of office, worth about $3,500, is no longer desired, leading to a motion from Councillor Wilson that, if it was no longer required, to remove it from the list of deferrals. In addition, the Mayor’s raise, which was voted on by the previous Council, will be used for Council and Staff training, at his request.

When the subject of transit came up, Councillor Whalen asked if the City wouldn’t be better off with their own transit system. This was quickly put to rest by the explanation of capital outlay for buses and problems with running our buses into St. Catharines. Thorold went with St. Catharines Transit 15 years ago in part because, since St. Catharines didn’t want competing buses on their turf, it was necessary to switch buses at the City limits and pay another fare to get anywhere in that city.

Councillor Handley then suggested that a bus route extend to port Robinson. Staff is preparing a questionnaire for Port Robinson residents to determine the demand for such a service and Council will have to decide from there.

The perennial subject of hiring an IT person for the City came up again last night, at a cost of roughly $100,000 per year. Apparently, Thorold is the only municipality in Niagara which doesn’t have such a person on staff and currently solves IT problems by the use contracted service at a cost of $10,000-$15,000 per year.

Councillor Wilson suggested that it might be costing more than the $100,000 per year for the present arrangement, since Thorold is well behind in the way of on-line services, as other municipalities have. He believes that we lose business from developers and possible employment opportunities due to Thorold’s lack of timely service. Staff also pointed out that it’s disruptive to be without services while waiting until the contracted IT person can make it.

 

Just so everyone knows, there is no Council meeting tonight, cancelled due to the weather. So there won’t be a report for it. The next time they meet will be Tuesday, March 10 for the second budget meeting, unless Council is rescheduled in the meantime (highly unlikely).

2 thoughts on “BUDGET 2015 – MEETING NO. 1, MARCH 2

  1. Thanks, Tony!
    If the privatizing of some City services is not going to be investigated/discussed, there are some instances where good money is being thrown after bad!

    Like

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s