A number of residents have voiced concern over the Puslinch draft budget, which contains a 5.12 per cent increase to the local portion of the tax bill.
Originally scheduled to take place in the township office on Jan. 21, the 70 to 80 interested residents warranted moving the meeting to the Puslinch Community Centre.
Though the full contingent of council was on hand, the purpose of the meeting was for director of finance/treasurer Paul Creamer to present information and for the public to present their opinions on what is being proposed.
“We will be listening to those opinions,” said Mayor Dennis Lever. He noted council is scheduled to receive the budget on Feb. 3 and intends to adopt it at the Feb. 17 session.
Creamer, who joined the township in August as a replacement for Mary Hassan, said he was pleased with the turnout.
He has several years experience working in the municipal sector and estimates working with roughly 30 municipalities on different projects.
Creamer said it is important for people to understand what it is that property taxes pay for in the township. Noting it was his understanding this marked the first time the township had held a public information meeting regarding the budget, he said, “It will be interesting to see how it goes tonight.”
He explained that in Puslinch, for every dollar of property taxes, the township receives 17 cents, the county gets 63 cents and 20 cents goes to the province for education.
Of the township’s 17 cents, Creamer said 25 per cent goes towards capital projects while the other 75 per cent is spent on operating costs.
He explained tax revenue funds township services such as parks and recreation, fire and rescue, public works, planning and development, building, general government (which includes council, committees, corporate costs and finance).
Bringing the message to home, he illustrated how the proposed 5.12% levy increase ($209,191) was divided between a capital tax levy increase of 3.94% ($160,880) and an operating tax levy increase of 1.18% ($48,311).
Creamer noted the total tax levy increase would have been 6.2%, but assessment growth lowered the impact on the average household to 5.12%.
He attributed the capital budget increase mainly to maintaining township assets, specifically roads.
“Right now we are facing challenges keeping our municipal assets in good condition – we need appropriate funding levels to do that,” said Creamer.
He suggested operating cost increases are keeping in line with inflation, but also include a base budget increase to the hours of the chief fire prevention officer by eight hours a week, representing an $18,240 increase.
Changes to the 2016 draft budget since from October include:
– moving capital work on Nassagaweya-Puslinch Townline to 2017;
– reducing the cost of the “quint” fire truck from $560,000 to $300,000 (due to being able to find one in Canada; originally, the township had anticipated having to go the to the United States to make the purchase) – the truck is now entirely funded through development charges and reserves;
– addition of septic system replacement at the township administrative building, at a cost of $80,000;
– adding a cost of living adjustment of 1.2%; and
– additional funds ($30,000) required for assessment appeals based on new information.
As to the impact of a 5.12% township tax increase, Creamer said the numbers were based on median assessments within the municipality.
In 2015, that amount was $588,000 but in 2016 the median is $614,000. As such, Creamer estimated the township portion of the tax bill would go up by $51 ($996 to $1,047) or the equivalent of an extra $4.23 each month in 2016.
Creamer stated that once county and education taxes are factored in, the overall tax increase is 3.58%.
In a review of operating expenses, Creamer noted 51% of the expense is for salaries, wages and benefits.
“This number is relatively consistent across the board for municipalities … because it is a service driven industry.”
Though the levy remains the primary funding source, Creamer said there are a number of other revenue sources, such as $315,000 from the federal gas tax. A lot of that funding is directed to highways and higher-level roads.
Creamer said the township is attempting to address a potential funding shortfall over the next 10 years to ensure township assets are properly maintained.
When asked what portion of the tax increase is being picked up by industry, Creamer said they would be impacted in the same way.
When asked if the township was unionized, the quick answer was “no.”
Concerns were raised as to how an elderly or retiring population will be able to absorb the tax increase while on fixed incomes.
Creamer was also asked if the township felt justified to give wage increases when there are people on fixed incomes.
“That would be council’s decision,” he said.
Puslinch resident Manfred Ganning did not see running a township as being different than running a business.
“When we have property assessments going up, I firmly believe that increase should cover any potential increases in property taxes … especially in these dark economic times.”
Ganning suggested “trimming back on a bloated administration.”
He also recommended a serious reconsideration of funds used to send councillors to conferences and additional meetings.
Ganning asked if council would consider undertaking a study to trim fat from municipal operations – from administration to other services.
Kevin Johnson had concerns that roughly 7% of the proposed 2016 budget would be funded through reserves, without any contribution to replenish those funds.
“If that continues, it’s like robbing Peter to pay Paul,” he said. “There are projects the township can choose or not choose to do.
“I think of this as an overspending problem.”
Johnson said the proposal is to spend 8% more than last year, which is modified because there is more assessment as a result of more houses being constructed.
Creamer agreed there are some withdraws from reserves to pay for some bigger projects this year.
Johnson contended that a budget that takes from reserves and still increases taxation … “it is not a funding gap, it is a spending problem.”
He did not believe it was realistic for a rural community such as Puslinch to provide the same services as nearby urban areas.
Johnson asked if any consideration was made to limiting any increase to the rate of inflation “… so we can afford to live here.”
Cheryl Ritter asked about the split between residential and commercial taxation.
Mayor Dennis Lever said industrial and commercial properties pay more taxes than residences, based on assessment.
However, in general, in Puslinch about 25% of tax revenue comes from industrial/commercial properties, with the remaining 75% from residential properties.
Ritter asked if the township has looked for ways to increase the commercial/industrial tax base.
“Constantly,” Lever responded.
He said the township has an economic development committee working in conjunction with Wellington County.
Others in the audience suggested that council should be doing something to gain more revenue from raw materials such as gravel and water.
Councillors will see a finalized draft budget on Feb. 3 with the anticipation of it being passed at the Feb. 17 council meeting.
For more information on the Puslinch budget, visit http://goo.gl/drUD3L.
