Township council has passed a 2018 budget with a 3.2 per cent increase in the local tax rate.
When blended with projected county and education taxes, the increase totals 1.27 per cent, explained finance director Karman Krueger at the Jan. 9 meeting.
The Mapleton budget calls for local expenditures of about $11.6 million next year, compared to just over $10.8 million budgeted in 2017. After factoring in revenues of about $4.25 million, the projected 2018 tax levy of $7.36 million is up by about $697,000 or 10.4% from the budgeted 2017 levy of roughly $6,661,000.
The average residential assessment in Mapleton, $335,000 in 2017, has risen to approximately $350,000 this year. Property taxes on a $350,000 home are estimated at $4,690 for 2018, an increase of $177, or about $15 per month, over 2017.
By comparison, a farm property (excluding a residence) valued at $350,000 would pay approximately $1,172 in taxes, based on the 25% tax rate for qualifying farmland.
A commercial property valued at $350,000 would pay slightly less than 1.5 times the residential ratio, or $7,035 in local taxes, but would pay proportionally more in education taxes. Industrial properties pay 2.4 times the residential ratio.
Krueger said the township is projecting a net revenue increase of around $65,000 from such areas as parks and recreation and facility rentals and an increased share of gas tax and Ontario Community Infrastructure Funding.
The township is also anticipating reductions in costs for economic development and operation of the medical centre in Drayton.
For the first time costs for street lighting will be blended with the total tax levy, rather than area rated.
The township is estimating an increase of about 2.25% (about $65,000) in total wage costs. The wage figure includes a general wage increase of 1.3% based on the Consumer Price Index, combined with staff progressions through the existing salary grid. Employer costs of benefits will also increase by about $12,000.
The township is also budgeting for a $15,000 combined increase to the levies it pays to the Grand River and Maitland Valley conservation authorities.
By far the largest share of township expenditures goes towards roads and bridges, on which Mapleton projects spending about $4.9 million, or 42% of the total budget.
Parks and recreation, at just under $2 million, and administration, at just over $1 million, represent the next largest areas, aside from water and wastewater, at $1.2 million, which does not impact the tax levy as it is factored into water and wastewater user fees.
The budget passed on Jan. 9 was unchanged from the proposed financial plan presented at a public meeting in Drayton on Dec. 9.
However, prior to passage, council discussed a proposal that could have eliminated the tax increase, or even resulted in a small tax decrease.
Councillor Michael Martin noted that during the budget process, council had reduced the scope of a road project on Sideroad 15 from $650,000 to $200,000, “yet we’re still contributing the same amount to our levy,” as the money is going into a reserve fund.
“There’s an argument to be made for keeping that $450,000 in the budget for future use moving forward. The flip side of that is our long-term financial plan hasn’t changed even from the last few years, we simply reduced the scope of one particular project …” Martin said.
“I was just trying to determine if we could take that $450,000 out of the operational side of the budget instead of contributing it to reserves? I know we’re depleting, I believe we’re depleting, most of our reserves with the road work that we have planned.”
He suggested the funds could also be put toward a different project in 2018.
Martin noted council has been “quite forward thinking” in previous years, raising the levy from around $4.4 million in 2014 to $7.36 million in 2018 in an effort to keep up with infrastructure costs.
Martin asked how taking all or part of the funds out of the 2018 levy would impact the budget.
Krueger replied, “Really the (multi-year) capital program that we have in play now, whether we fund it in the current year or in a future year doesn’t make that much of a difference, but we have to raise the funds at some point.
“Any reduction in the levy transfers would just defer the requirement to collect it from the ratepayer.”
Krueger explained a $225,000 reduction in the levy “would result in the tax rate (increase), both local and blended, being approximately zero per cent.”
She added that if council were to reduce the levy by the entire $450,000, “you’d be looking at a reduction,” amounting to about one per cent on the blended tax rate.
“You could reduce the blended tax rate, it’s not a significant decrease … but it is possible to do. But it just defers it to a future year.”
Mayor Neil Driscoll asked public works director Sam Mattina if his department could get a project ready to make use of the funds if they were made available for a project, rather than removed from the levy.
“I would have to say yes, it’s possible to incorporate that $450,000 into another project,” said Mattina.
“We could expand our capital program and do more of what’s on our roads capital needs program, as well as on our structural capital needs program.”
“But if we didn’t get it all done this year, the money would still be there and already collected so we could use it next year,” observed councillor Dennis Craven.
Driscoll said, “Essentially were approving a budget. Sam could come to us tomorrow and say ‘Okay we’ve got a major change and we’re going to do this road instead of that road.’ Our budget isn’t this road or that road, it’s dollars.”
Krueger noted that by approving the budget, “you’re also approving the capital program as presented, so you may what to reframe something if you’re going to change that.”
Also, noted deputy clerk Barb Schellenberger, “The capital program is more than 2018. It’s looking out 10 years.”
Martin indicated his intent was to discuss the idea of reducing the levy, rather than promoting one project over another.
“More it’s philosophically do we want to throw a bone to our rate payers just because of the increases that we’ve had?” he explained.
“The unfortunate part about having this conversation now is it’s an election year. That is the elephant sitting in the room. It shouldn’t be part of your thinking … What makes good financial sense should make good financial sense regardless of the year. So that was my hesitancy in bringing this forward.”
Craven said, “I think as far as infrastructure is concerned we have to remain very ambitious about it … or we’re going to be in a spot in two or three years where we can’t handle it at all.”
A resolution to approve the budget as presented passed unopposed.
