MINTO – The Town of Minto is taking a cautious approach to budgeting for 2019 in anticipation of “what may be a big change in the provincial-municipal relationship.
“With the 2018 election of the first Conservative provincial government since 2002, clear direction on the new provincial-municipal relationship must now emerge,” states a budget summary report prepared by town staff.
Presented to council by Fire Chief/acting CAO Chris Harrow and treasurer/acting clerk Gordon Duff at a special budget meeting on Jan. 15, the report adds, “Budget 2019 is prepared based on the current funding from the province being frozen at 2018 levels.”
Uncertainty about the future of the Ontario Municipal Partnership Fund (OMPF), from which the town received about $1.6 million in discretionary funding in 2018, has made budgeting for 2019 a challenge, Duff pointed out.
“We’re presenting what we can control. The big unknown is roughly $1.6 million,” said Duff, adding, “We’re very dependent on that.”
Provincial treasurer Vic Fedeli sent a letter to municipalities before Christmas warning the OMPF program is under review.
“The province is taking a hard look at this whole program,” Duff said.
While the draft 2019 budget assumes the same level funding as last year, “if we get some new information, hopefully before our capital meeting, we’ll have to revise that,” Duff advised.
Harrow said the impact of any cuts to OMPF could be dramatic.
“Last year we took a fairly significant hit,” he stated, noting the town lost about $170,000 in OMPF funding compared to the previous year.
“If we get another cut similar to what we got last year, as Gord said, that’s going to be a pretty significant thing that we’re going to have to overcome. We need this funding. We base a lot of our stuff on this funding.”
Harrow added, “It’s very difficult … to do a budget when you don’t know how much funding you’re going to get.”
The draft budget projects a levy requirement (the amount to be raised through taxes) of just under $5,191,193, an increase of $243,786, or just under five per cent from the budgeted 2018 levy of 4,947,407.
The levy includes about $520,000 in tax-supported capital expenditures.
Total spending for 2019 is projected at $6,301,893, up $323,786 from the $5,978,107 budgeted in 2018.
Combined with county and education levies, the overall tax increase is projected at less than 3% for the average residential ratepayer.
Harrow said it’s important to remind citizens that “for your tax dollars we only get to keep 38 per cent.”
He also pointed out that at current spending levels, “Right now a one per cent increase in tax rates would equal another $49,000 for the town, so not very much.”
The budget for council operations is projected to rise by $17,600 to reflect the cost of raising remuneration to make up for the federal government’s elimination of a one-third tax exemption for councillors. The new pay rates were adopted by the outgoing council for the 2018-22 term.
Duff explained the loss of the exemption will affect each councillor differently based on their own marginal tax rates.
“I hope that our taxpayers will look at it and say, ‘You know what? They’re not getting any more money than they got before,” said Mayor George Bridge. “But in some cases you’re going to get a little less.”
Bridge said he does not understand the government’s reasoning for the move.
“This is really affecting small towns and small municipalities across the board,” he said.
“You know the government’s making money on this because now they’re going to get more taxes … Maybe they felt that all the municipalities were going to take a cut in pay because of the difference, but I’m sure if it was on their watch and they were getting the cut in pay, I’m sure they would be really happy about this.”
The general administration budget, which includes the treasury and clerk’s departments, is down $15,500 due to succession planning initiatives. Those include re-allocation of duties to the fire chief and other senior staff and replacing the CAO/clerk with a clerk’s assistant position. It also includes a new position in the treasury department, the report notes.
Savings are anticipated as it’s not expected that former CAO/clerk Bill White, who retired in December will be replaced until sometime in the spring.
White was also acting as public works director in place of former public works director Brian Hansen, who left the position in March of 2017 and was not replaced. The draft budget does not include a new public works director.
CAO replacement
How the CAO position is ultimately replaced will also impact the budget in 2019 and future years.
At its Dec. 4 inaugural meeting council appointed Harrow as acting CAO and Duff as acting clerk for terms of six months while council evaluates a final course of action.
“Budget 2019 is prepared based on council promoting a member of the senior management team to the position of CAO and retaining management responsibilities in their original department,” staff states in the summary.
The budget also notes if council promotes a CAO from within it will also need to appoint a clerk. The draft budget is based on the clerk’s statutory duties being assumed by current staff.
“If council approves promoting from within in both cases, the organizational structure is then backfilled with younger front line staff at a lower cost,” notes the report, which projects total savings of $80,000 as a result of the CAO retirement and succession initiatives.
The succession plan also recommends reducing the senior management team by merging positions and promoting internally “where it makes sense.”
Other highlights in the operations budget include:
– the projected public works budget is up about $215,000, primarily due to debt servicing fees for the Clifford Connecting Link project and the town’s share of municipal drain assessments;
– the winter control budget is down by $24,000 mainly due to reallocations of snow maintenance revenue.
– with the trailer park in Harriston now closed, the town will look to redesign the space in conjunction with the rest of the grounds at the Harriston arena. The bottom line to the town increased over $5,000 due to lower maintenance expenses;
– the overall recreation budget increased about $55,000 primarily due to one added staff member and new facility initiatives. Those include expanding the after-school child care program to Minto Clifford PS, full assumption of the Palmerston Railway Heritage Museum, a slight reduction in the rent for cultural groups in the Harriston Library and a rent increase from the county for use of facilities located in library buildings; and
– the economic development and tourism budget is up by about $35,000. The department’s share of the debt servicing of the Clifford Connecting Link project (for street enhancements) and wage increases account for the bulk of the change.
“Budget 2019 demonstrates continuity as Minto moves forward under a new council and re-structured administration to establish a relationship with a new provincial government,” staff state in the summary.
“Until the provincial direction on OMPF and OCIF (Ontario Community Infrastructure Fund) transfers is announced, the budget must remain in a holding pattern … In many ways continuity may mean minimizing the impact of provincial changes on the overall budget by deferring major decisions on staff replacements and growth until 2020.”
A second budget meeting set for Feb. 12 at 1:30pm will include capital budget discussions.
A public budget open house is set for March 19 from 5 to 6:30pm.
