ELORA – Council did not approve the 2025 budget at its June 10 meeting, but it did lay the groundwork for staff to get going on it.
So don’t be alarmed by the 6.3 per cent tax increase noted at the meeting.
It is a starting point only, treasurer Adam McNabb told council when he presented the budget direction document.
McNabb outlined nine items that will guide the 2025 budget: inflation, the asset management plan, the termite management program, assessment growth assumptions, fees and charges, funding for bridges and culverts, development charges, assumptions about capital funding sources, and timelines and milestones to reach budget approval by December.
Inflation
Inflation impacts both the operating and capital budgets, McNabb told council. The township looks at the Consumer Price Index, which is now resting at 2.7% and the Non-Residential Building Construction Pricing Index, which is 7.5%.
Together that blends to a 4.5% increase.
Asset management plan
The township puts money aside for repairs to its assets – roofs on its buildings, roads, and so forth.
The 2022 Asset Management Plan calls for a 2% annual increase, but that wasn’t done last year in an effort to reduce the increase to taxpayers.
But it’s time to resume the 2% contribution to the asset management plan, McNabb said.
Termite management program
Last year the township used $88,500 in OLG funds that should have gone to the economic development reserve to set up a reserve for the termite management program.
McNabb said that practice cannot continue or the economic development reserve will be depleted.
He said a separate levy of $88,500 should be added to fund the termite management program.
Assessment growth
Growth increases revenue for the township, but also its expenditures as the municipality has more roads to plow, more fires to attend to, and more parks to maintain, for example.
McNabb said the township’s position is that growth should pay for growth and will assume a 2.5% increase in assessment growth as staff prepares the 2025 budget.
This will be updated with actual figures in November.
Fees and charges
Most of the township’s fees and charges – from permits to recreation to water and wastewater charges – are based on cost recovery, but some categories are subsidized by property taxes.
Staff want to assume a 4.5% increase in fees and charges in 2025 to reduce the impact on the tax bill.
Ontario Community Infrastructure Funding (OCIF)
While the township received a “windfall” OCIF contribution in 2022, this funding source for bridges and culverts was reduced by 15% in 2024.
Staff will use the 2024 contribution of $2.5 million in the 2025 calculation.
Bridges and culverts are also funded through a dedicated levy for this purpose.
Development charges
These are fees collected from developers for growth-related projects.
With growth still in the forecast, staff recommend assuming $1.9 million in growth-related projects.
Capital funding
The township has a few sources of funding for capital projects, the general capital reserve being one. Staff recommend using $2 million from the reserve for capital projects in 2025.
The Canada Community-Building Fund (CCBF) is another funding source for capital projects. Staff recommend using $1.77 million from this source next year.
Council approved an Ontario Lottery and Gaming funds (OLG) Proceeds Allocation Policy in 2024 that distributes OLG funds as follows:
- 90% for township capital projects;
- 4% for Community Impact Grants;
- 3% for economic development; and
- 3% for heritage.
Staff estimates it will receive $2.9 million in OLG funds this year and wants to earmark $2.8 million of that for capital projects in 2025.
Bridges and culverts are funded from a dedicated capital levy as well as from OCIF funds.
Staff is assuming $1.2 million in OCIF funding and $1.6 million from the dedicated capital levy to pay for the next round of bridge repairs in 2025.
Adding those totals together, the township should have $7.8 million for capital projects in 2025.
Timeline
The timeline for the 2025 budget includes:
- Sept. 19, preliminary capital budget review;
- Oct. 1 to 31, public input through Connect CW;
- Nov. 5, budget impacts report and discussion and public delegations;
- Dec. 3 and 5, more budget deliberations and public delegations; and
- Dec. 16, budget approval.
Councillors did not want to see a 6.3% tax increase and hoped that starting number could be whittled down a bit.
“We did pass 7.4% last year,” said councillor Lisa MacDonald. “So I’m looking to see that lower. I think 6.3% will be difficult for residents.”
Councillor Jennifer Adams wondered about the fees and charges increases.
While some organizations would not experience financial harm with a 4.5% increase, it would be a substantial increase for a family paying for swimming lessons for their kids, she suggested.
Councillor Bronwynne Wilton agreed and asked that fees and charges be looked at in a “nuanced” way.
CAO Dan Wilson said staff have heard council’s desire to keep any tax increase as low as possible and will “come back with potential reductions and implications,” he said.
With that assurance, council approved the 2025 budget directions.
