Huron East staff has cut $1.6 million from the first draft of the budget - March 1, 2018
BY SHAWN LOUGHLIN
Huron East staff has been able to work its magic on the municipality’s budget, turning a large deficit into a small surplus before presenting council with the first draft last week.
At council’s Feb. 20 meeting, Treasurer Paula Michiels presented council with the first draft of the municipality’s budget, which included a proposed six per cent increase to the general municipal tax levy.
The increase would bring an additional $245,000 into the municipality through taxation over last year’s levels. Michiels told councillors that the increase would work to negate the loss of Ontario Municipal Partnership Fund (OMPF) money which, when factored in with an increase in Ontario Community Infrastructure Fund, totals $147,500, as well as pressures associated with inflationary wage increases and the increase to the minimum wage through Bill 148.
Michiels told council that the first rough draft of the budget she compiled included a $1.5 million shortfall. Quickly, however, through a number of departmental cuts, that red figure moved into the black, as staff was able to find nearly $1.6 million in cuts. This turned a $1.5 million hole in the budget into a surplus position of approximately $72,000.
Nearly all of the cuts came from the Public Works Department, with several road reconstructions, a new grader and gravel and dust control maintenance proposed to be cut. The only item to be cut that wasn’t from that department was the installation of a glycol loop system at the Brussels, Morris and Grey Community Centre.
This small surplus will be coupled with a year-end surplus from 2017 that sat at nearly $76,000 at the time of the meeting. Michiels, however, cautioned councillors from counting on that number, saying that by her estimations, it would most certainly shrink by the time she would be able to complete year-end accounting for 2017.
Michiels said that all departments were instructed to bring in their budgets at 2017 levels, with the exception of the municipality’s community centres, which have been allotted some flexibility.
She said that the base levies for community centres in Brussels, Seaforth and Vanastra have all increased by four per cent. In addition, all three centres have also been provided with special levies to help further reduce their deficits. In 2018, the Brussels, Morris and Grey Community Centre will receive $28,839 through this special levy, while the Seaforth and District Community Centre will receive $20,442 and the Vanastra Recreation Centre will be given $22,429. The levies are presented in this year’s budget at the same level they were the previous year.
The Brussels centre is then projected to end 2018 with a deficit of $77,087. This comes after beginning the year with a deficit of $81,078 and reducing the hole by nearly $20,000 over the course of the year, which began with a deficit of over $100,000.
The Seaforth centre began 2017 with a deficit of $118,711 and it increased over the course of the year to $126,060. With the deficit reduction levy, the centre is projected to end 2018 with a slightly lower deficit of $125,871.
The Vanastra Recreation Centre ended 2017 with a surplus of over $13,000 and is projected to end 2018 with a deficit of just over $4,000.
The Brussels division of the Huron East Fire Department is due to purchase a new tanker this year for a total of $353,150. The truck had been slated for purchase last year, but was shifted to 2018 due to delivery delays.
Council had budgetted $300,000 for the equipment purchase in 2017 and now has to budget an additional $53,150 to buy the truck this year.
The Grey division of the Huron East Fire Department will receive an additional $85,000 in this year’s budget for building renovations at the Ethel fire hall building. This work will allow for the construction of a meeting room, after originally being included in last year’s budget but being deferred to 2018.
Council will be paying $90,000 to the Seaforth and District Community Centre for the replacement of its ice machine, while the Brussels, Morris and Grey Community Centre will receive $60,000 for the replacement of its condenser. Funds to the Seaforth centre will be paid from its Northland Vibrancy Fund and the Brussels project will be funded from the St. Columban Vibrancy Fund, both of which are paid for the municipality’s participation in local wind energy projects.
The Public Works Department has also requested a number of new pieces of equipment in 2018, which raised a few eyebrows around the council table.
Director of Public Works Barry Mills is requesting a new backhoe (which was trimmed from the budget in both 2016 and 2017), a one-tonne truck, two pickup trucks, a lawn mower and a combination lawn mower/sidewalk snow removal machine. The total cost of the proposed equipment purchases is $330,000.
Several councillors spoke up, saying they didn’t feel the municipality needed to buy all of that equipment when it was cutting numerous road repair projects.
Councillor David Blaney said he is becoming increasingly uncomfortable with the state of the municipality’s roads. Looking at risk reports provided to the municipality, he felt council could no longer afford to keep putting off paving.
At the rate of repaving four roads per year, Blaney said, it would take Huron East nearly 35 years to pave just the high-risk roads in the report. Over that period of time, Blaney estimated that another 49 roads would enter the high-risk designation, further compounding the problem.
“There is absolutely no way we can leave the next group of councillors or the next group of ratepayers with this kind of bill,” he said.
He said he felt that council has been “kicking the can down the road” for far too long and that repaving just four roads per year just wouldn’t cut it.
Chief Administrative Officer Brad Knight said that while Blaney wasn’t wrong, the municipality has done a great job of keeping up with its bridge maintenance. He lauded the decision of the council of the day that decided to dedicate its provincial gas tax funding to the municipality’s bridge reserve, which ensured a steady stream of funding for a maintenance issue that wasn’t going away. Huron East, he said, is in much better shape with its bridge maintenance than many of its neighbouring municipalities because of that decision.
In regards to the overall budget and the $1.6 million in cuts proposed by staff, Mayor Bernie MacLellan said he had concerns. Whether staff was inflating the budget in order to then cut it later in the process or if staff was cutting items the municipality shouldn’t be delaying, he was worried about the budget process. He said the municipality shouldn’t handicap itself by keeping taxes too low and not being able to provide services to its residents. Cutting too close to the bone, he said, may put council in a tough position in the future.
If the first draft of the budget were to be adopted, Michiels said that the overall tax rate, when factoring in increases at the Huron County and local school board levels, would increase by an average of 4.88 per cent across the municipality. Broken down, Brussels would see a tax rate decrease of 0.3 per cent, while the tax rate would increase in Seaforth by 0.5 per cent, five per cent in Tuckersmith, 7.5 per cent in Grey and 8.7 per cent in McKillop.
In regards to the two surpluses, one of which has yet to be finalized, several councillors said they felt they should be used in order to reduce the tax rate even further.
With the exception of further review of the public works equipment purchases, council didn’t give Michiels any further direction on the second draft of the budget, which will be presented at a future meeting.