Budget 2015-001

The process of setting the annual City of Thorold budget started last night with mostly an overview of the numbers and the process and it looks from here that there are going to be a lot of unhappy people no matter which way this goes. But then I suppose that’s nothing new where politics is concerned: damned if you do, damned if you don’t.

There’s a lot to this, so I’ll start off in point form, with the numbers as they are if the budget is adopted as presented. Chief Financial Officer (CFO) Mauro pointed out that this budget is presented to meet Council’s target requirement of a maximum tax increase of 2.5 and is not endorsed by Staff.

  • Gross expenditures: $17.9 million, of which $12.3 million is to funded from the levy (taxes)
  • Tax increase (City portion) of 1.49% or app. $20 for the average ($216,550 assessed value) home – actuals will depend upon the property class, etc.
  • Every $118,000 added to the levy = 1% increase
  • Borrowing costs about $103,000/year or 0.87% of levy for each $1 million over 10 years
  • This budget keeps in mind the Capital Asset Plan (necessary for certain future grants) and the general maintenance of service levels
  • 49% of the budget is labour costs (wages and benefits)
  • A new building permit expeditor position will be paid for by development charges and an extra by-law officer by expected new rental housing permits
  • The City will still be in a shortfall position of more than $3.9 million to sufficiently fund assets, particularly transportation assets ($2 million under), such as roads, bridges, streetlights, etc. – this amount is intended to be phased in over 10 years
  • There is also a $1.9 million shortfall for non-infrastructure assets, such as vehicles, equipment, computers, tools, furniture, etc. – meeting the prescribed target won’t allow much to help that
  • Transit is to be cut partly because of ridership, partly because Thorold’s share of the gas tax has been dropping every year
  • $1.43 million in outstanding debt
  • $510,000 in interest is expected from the Hydro Reserve – already spoken for
  • Budget increase forecasts 10.4% in 2017, 8% in 2018 and 7.2% in 2019 if this budget is adopted as presented – increase for 2016 had been forecast at 11.4% – number of deferrals and cancellations moves the increases back a year but now accumulates to more
  • $14.23 million in deferral – was $7.1 million for 2105 – every year adds deferrals and costs of deferrals goes up
  • Elimination of all Community and Committee grants, including ice and other sports subsidies
  • User fees have become a smaller percentage of City revenue over the years. New user fees: sports fields and lighting, swimming and swimming lessons
  • Expected revenue from rental licensing fees – $200,000

Council got part way into the specific departments last night and one of the first things to be added back in was the community event-related economic development money (Santa Claus Parade, Canada Day, etc.), as moved by Councilor Ugulini. Don’t be surprised if all the other grants are put back as Council gets to the departments that oversee them. Most people know my opinion on this – the community groups that receive these grants, for the most part, deliver a return in labour quality of life that the City could never afford to buy.

Councilor Charron moved that the hiring of an I.T. Manager be put back on the table, citing the need for any modern organization for such an expert. CAO Fabiano pointed out that the City has been budgeted for new finance software for three years, but they’ve been unable to purchase it for want of someone who could oversee the installation. Councilor Longo suggested looking into a contract hire rather than an employee and Councilor Neale said he would support the budget item but suspected it would be pulled later, after they’ve gone through all the priorities. Councilor Paone commented that not having an I.T. manager these days was “like having a fleet of trucks without a mechanic.” The motion passed.

Any and all of these changes could be removed again in the last session as they are presented with the impact of the changes they’ve made.

At the end of the night, the budget’s position was a 2.43% Thorold increase (0.97%) overall, for an average cost of app. $31.00.

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