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2014 budget in detail

The Town portion of property tax bills will increase by 3.88 per cent, but the overall increase will be moderated by smaller increases in the Regional and educational components.

[Originally published Feb. 10, 2014]

The overall increase on the tax bill for a household assessed at the median average of $175,000 will be less, although the final figures have not been calculated.

The Regional component is expected to increase 0.64 per cent and the education component rises 1.25 per cent.

. . . continued

The Town portion of property taxes is 39 per cent of the total tax bill.

A Town press release says the local portion of taxes will increase 2.72 but fails to include the impact of the phased-in property assessment increase that will show up on tax bills as a larger increase.

Town council approved a general levy (revenue from taxes) of $21,543,574, an increase of $805,976 over the budgeted 2013 levy of $20,737,598.

Tax writeoffs nullify growth

Assessment growth exceeded taxation write-offs in 2013 by only $9,000. The vast majority of write-offs were due to assessment appeals. In total, growth accounted for $206,000 in new taxes and write-offs cost $197,000.

Several large commercial and industrial assessment appeals are outstanding and the potential reductions are not known, but the Town has budgeted $175,000 for those eventualities.

Town staff estimates new assessments based on building permits that were issued in 2012 and 2013 will add $170,000 in taxes.

Grant mitigates assessment decline

A big shot of new revenue comes from the provincial government. Where staff had expected the elimination of the Ontario Municipal Partnership Fund grant of $51,000, the Town will receive $339,000.

This is an Assessment Equalization Grant provided to municipalities with limited property assessment due to lower property values and limited non-residential assessment, according to the OMPF technical guide.

A second big shot of new revenue will come from an increase in interest and penalties on overdue tax bill and water bill payments amounting to about $165,000.

Other increases include revenue from payments-in-lieu of taxes, cell phone tower leases and some user fees of $93,000 which will offset an expected $60,000 drop in building permit revenue.

The Town will also get $20,000 more from the province’s gas tax for transit services for a total of $270,000 in 2014.

Base budget expenses

Operating expenses (not including capital expenditures) to maintain current services decisions will increase $26,000.

Along with anticipated increases in assessments and non-tax revenue, staff recommendations on the base budget called for a 1.98 per cent decrease in taxes.

Changes are itemized as follows, according to the budget report:

With the Central Avenue fire station having come online, the debt payments begin with $176,000 due in 2014.

Overall wages and benefits are budgeted to increase by $78,000, not including an additional $40,000 for staff time required to maintain enhancements at Optimist Park and other parks.

Wage rates are subject to change depending on the outcome of union negotiations.

Insurance costs will be decreasing by nearly $200,000 as a result of dropping the Ontario Municipal Exchange system, which called for a $71,000 increase for 2014, and going back to a private insurance company.

An error in the 2013 budget will come back as a savings of $26,000 for transit services as staff forgot to include the rebate for HST for the transit contract. The Town does not pay HST and taxes charged on contracts are rebated back.

The base budget for materials and services will increase by $98,000 for vehicle licences, postage, fire inspection software, asset management plan licences and actuarial services required for valuation of retirement benefits.

The library board basic grant is increased by $30,000. The total grant is $1.4 million.

The EDTC base grant increased by $8,700. The total grant is $630,000.

Supplemental budget expenses

As well as the base budget, which by itself would have meant a 1.98 per cent decrease in taxes, another $984,000 in expenses were added by councillors in what are termed supplementary budget items.

These expenses result from council requests and staff recommendations for additional spending. They generally reflect new programs or expenses that may be one-time expenses or ongoing additions that will be added to next year’s base budget.

Chief among these is an allocation to reserves to finance the future replacement of infrastructure assets. The lifetime of assets can range from 10 years for vehicles to well over 50 years for buildings, roads and storm sewers. Water and sewer infrastructure is financed through water bills.

Following an inventory of assets conducted in 2009 which was required by the government, the “capital asset amortization” for 2014 is $5.8 million which is a measure of the cost of “consumption” of the assets.

Based on the historical rate of reserve allocations, staff had recommended the Town allocate an additional $2.5 million per year and set up a five year schedule of $500,000 increases to reach that amount.

Last year, council had trimmed $100,000 from the recommendation. This year staff recommended $600,000 and council approved only $500,000, which means staff will recommend $700,000 next year.

All told, with the approved $500,000 increase, the Town will be allocating $4.3 million to reserves. Generally, surpluses from capital allocations are put back in reserve.

“This means the Town is utilizing the economic benefit of its capital assets at a rate faster than it is investing in capital assets on an annual basis,” writes treasurer Helen Chamberlain in her budget report.

Other supplementary items council approved:

– $200,000 yearly commitment for construction of a proposed South Niagara hospital

– $84,000 increase for service level enhancements to parks, cemeteries, beaches and trails

– $15,000 for an Integrity Commissioner

– $45,000 for additional library staff

– $15,000 for health and safety supplies and equipment

– $12,529 operating assistance and repairs to Kinsmen Pool

– $28,000 additional funding for watering plants in the Business Improvement Areas (Ridgeway, Bridgeburg, Crystal Beach)

– $3,000 for health and safety training

– $30,000 for demolition of the concession stand at Bay Beach

– $10,000 to establish systems to receive payments via the internet

– $26,500 for the Fort Erie Lions Senior Citizens Complex;

– $14,467 reduction in ice-time fees for the Fort Erie Minor Hockey Association

– $12,500 for the Niagara Community Foundation

– $50,000 for consultant to develop an “industrial lands strategy”

– $10,500 for the Beachcombers Senior Citizens

– $1,000 for the Fort Erie Horticultural Society for flower plantings at town hall

– $24,350 for Community Events.

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