Final budget not yet determined
by Sandy Lindsay

January 22, 2016

Town Council

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Saugeen Shores staff and Council have been sharpening their pencils over the 2016 budget and they haven't finished yet.

At Wednesday's (Jan. 20/16) budget meeting, several capital spending items were either deferred or removed to whittle away at the numbers and reduce the tax levy.

At the first go-around in November, the total capital budget was reduced from over $10.2 million to $8.3 million with tax funding being reduced from almost $3 million to $1.4 million. 

At Wednesday's meeting, 13 projects were deferred to be approved or reviewed by Council in future years  with another nine that were either reduced or split over two years and three were removed altogether.

Since 2014, the Reserve Fund balances have gone from $20 million to $16 million in 2015 and preliminary totals of approximately $15 million for 2016.  While the balance has gone down to meet various projects, repayments are scheduled so that reserves will be brought back up.

Unfortunately, there are several pressures that are affecting the 2016 budget process with one of the primary reasons being a $206,000 cut by the Province in municipal funding. 

In addition, Saugeen Shores has been turned down in 10 grant applications for proposed projects due to MPAC's high assessments of property values in combination with what the province considers as low property taxes in an area it deems as high income.

MPAC is the Municipal Property Assessment Corporation that was established by the Province and is responsible for assessing and classifying properties in Ontario.  The average property value in Saugeen Shores is $282,000.

Factor in funding decreases and increases, in areas such as proposed service levels at $470,000, and the pressures begin to add up substantially.

By deferring several items, decreasing some and removing others, the municipals tax levy was reduced to 7.63 per cent. 

Among the many items that were deferred were the proposed Trail at North Shore Park ($55,000), Beiner Trail resurfacing ($22,500), Pool wall painting ($20,000), the Port Elgin water tower replacement ($1.35million) and an Economic Development Master Plan ($40,000).

 Mayor Mike Smith left the Mayor's chair in order to put forward a motion to further reduce the amount by one per cent from the Tax Stabilization fund.  "There is $77,000 left in this fund and I move that we use at least one per cent to reduce the tax levy," said the Mayor.  Council agreed and passed the motion that reduced the municipal tax levy to 6.63 per cent with a blended rate of 4.31 per cent.

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When it came to removing some projects from the budget, Deputy Mayor Luke Charbonneau said that in order to get to the goal of reducing the budget by some $200,000, items were going to have to be sacrificed.  According to Charbonneau, there are projects that are not deemed as 'necessary' and should be excluded from the 2016 budget.

Councilor Neil Menage also questioned why some projects were in a five-year plan and others were coming to budget for the first time for consideration when the others had not yet been approved.

Vice-Deputy Mayor Diane Huber questioned why some of the proposed projects could not be funded from reserve funds in response to deferring playground equipment improvements.  "We seem to fund vehicles every year, and I'm sorry, but we need more opportunities for children to be outside and I request that we use some reserve money for things like playground equipment."

Following Huber's comment, some projects were in fact funded from reserve funds.

When it came to larger projects being funded through reserve funds, Councilor Mike Myatt expressed concern that borrowing from reserves on the surface sounds good but, when it comes to the Harbour and Tourist Camps, was the increase in user fees adequate to prevent falling further behind in revenue.  Mayor Mike Smith said however, that he did not see a problem with borrowing from reserves as long as debentures were built into the operations plan.  At the end of the meeting, Treasurer Sue Dent said that the municipal tax levy was sitting at 6.64 per cent with the blended rate, that takes into account both the County and Education levies which haven't yet been decided and, therefore, further reduce the tax increase, is now at 4.31 per cent.  The interim rate translates into approximately a $127.00 tax hike for property owners in Saugeen Shores.

The revisions to the budget may come forward at a further budget meeting or future Council meeting.

To read the entire budget submitted,  Click Here  (allow time to load).

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Friday, January 22, 2016