While the numbers aren’t yet final, the Town of Erin is looking at a 2016 tax increase of about four to five per cent for 2016.
The town’s second operating budget meeting on Jan. 20 ended abruptly after heated words were exchanged between councillors and Mayor Allan Alls declared one councillor out of order.
Finance director Sharon Marshall presented the $9.25-million operating budget at the meeting, a 0.4% decrease from 2015.
But she asked councillors to decide on several budget options that would increase the budget by $184,300, or 1.58% more than last year’s operating budget.
The increase would mean a 5.5% increase to tax rates for residents.
Council decided to cut a Community Improvement Plan reserve contribution of $20,000 and to cut the fire department’s supplies, materials and equipment budget to $160,000 from $180,000.
Marshall said with those changes the tax increase could be anywhere from 4 to 5%. The numbers are not final, however, and will be more concrete for the next meeting.
“You’re overall total budget expenditures are down 0.4 per cent from last year and I’m happy to say that certainly shows the commitment of this council and the directions you’ve given the department heads to try to maintain a low increase in operations,” Marshall said at the start of the meeting. “ I think we are taking your commitments seriously.”
After all options were discussed and debated, councillor Matt Sammut, who previously told council he would like to see the operating budget slashed, said he needed to have his say about the proposed tax increase.
“To survive, you’ve got to slash it, that means your service standards are going to lower, but sometimes you got to do it,” Sammut said.
But other councillors didn’t agree with that philosophy.
Councillor Jeff Duncan said cutting services saves only “peanuts” at the end of the day.
“If we go forward as that as a philosophy, we have to try to remember … how much really is it going to save taxpayers by doing those service cuts,” Duncan said.
Alls agreed, saying, “The calls I get aren’t about the taxes, they’re about why isn’t my road plowed or why isn’t this done.”
Sammut said, “If we are in a very high tax jurisdiction, it’s our job over the next three years to fight like hell to improve it,” Sammut said at the second meeting.
He opined that council should not be happy about a small 2016 tax increase when Erin residents are already paying high taxes compared to other areas.
But Alls said staff has tried to keep costs low.
“I think they’ve done a damn good job at getting costs in line as much as they could. They certainly honoured what we suggested at the beginning to try to keep it in,” he said.
Alls added that he disagrees with Sammut, essentially saying he doesn’t think Erin residents are paying more than other areas for the same services.
“If you tell our taxpayers that they’re not paying significantly more than other areas …” Sammut started, but Alls shut him down.
“I didn’t say that; that’s not what I’m saying. What I’m saying is that we’re getting value for the dollar,” said Alls.
Sammut retorted, “Then tell me the services they’re getting to justify it … we got a problem in our community and we got to recognize this and until we say there’s a damn problem, we’re not going to fix it.”
When Alls asked Sammut for a solution, Sammut said council should hold strategic meetings.
Duncan said town officials have been going through the budget in detail trying to cut and save where they can.
“As you go through these you start to see … there isn’t … extra waste or fat that’s out there,” Duncan said. “There’s things that we are mandated to deliver and the commodities that we are stuck paying with and having a resident base of 12,000 people for the things we have to do; it’s not magic that we can all of a sudden lower tax rates.”
Duncan suggested that if Sammut did not agree with a line in the budget, Sammut should bring it up for discussion and a vote.
“Just having large statements that things aren’t good or whatever isn’t helping the situation,” said Duncan. “It’s a negative atmosphere and we are trying to deal with our budget on a day-to-day basis. This is our opportunity to bring those costs down.”
Sammut said the problem is for a certain group, not the farmers paying 25% of their taxes or the homes valued at $400,000 – but the homes valued at $700,000 or more.
“You can do simple comparisons right next door. You have a $1-million house in Caledon, you have a $1-million house here. You’re paying about $12,000 in taxes (in Erin); over there your going to pay about $6,000,” he said.
At that point, Alls said he did not want to get into that argument.
Sammut told the mayor he would start sending him information about it.
“I don’t need your lecture, councillor Sammut. I’m calling you out of order,” said Alls.
The mayor asked if anyone else had anything to add about the budget, then he adjourned the meeting and promptly left the council chamber.
The meeting ended abruptly without setting another discussion date, so Marshall said she would work toward presenting the budget at the public meeting on Feb. 16.
Challenges, opportunities
Marshall highlighted the challenges the town faces this year, namely rising hydro costs.
She predicts hydro rates to increase 6 to 12%.
As for opportunities, the town’s Ontario Municipal Partnership Fund grant was increased by $7,300.
She also noted lower fuel prices, a modest increase in growth assessments and the paid debt for the recreation facilities as opportunities.
Operational review
One of the optional expenses was $23,800 for the organizational/compensation review the town is undertaking.
Councillor John Brennan asked if the town could delay the review until next year.
CAO Kathryn Ironmonger said they could not because “it is an expense you are going to occur this year.”
She explained the town is undertaking the review, which will shift positions on the pay equity grid and expenses will be incurred as a result.
There was some confusion about what the money was for and if it was for a consultant, but Marshall added the consultant cost was in the capital budget.
“There has not been a regression line done on the organization system since 2011, there’s going to be some costs associated with that as well,” said Ironmonger.
Brennan asked if they could not do the review this year.
“You have an obligation to make sure your pay equity group is compliant,” Ironmonger said. “It’s not an option.”
“Then why is it listed as an option?” asked Brennan.
Sammut asked if it had to be done by a consultant, and Ironmonger said she believes so.
“We’ve already engaged the process. I think it’s surprising people that that’s what the process was. A lot of us, I think, believed it would also analyze your chart and determine efficiencies and lack of in the organization. Instead all it’s going to do is look at a pay equity and regression scale and say give a whole bunch of people more money,” said Sammut.
Ironmonger replied, “You’ve taken (town) positions and changed their job responsibilities. Their job responsibilities, basically in all of the jobs, have changed. It’s now reviewing those job descriptions and putting a point value to it, which falls into your grid.”
Sammut said, “I’m just not sure why you would have to go to an outside consultant to say come in and review us every five years.”
Ironmonger said the reorganization of the staff has triggered this review – and it needs to be done.
“An example is when you have positions vacant and you are looking at trying to fill vacancies. If your pay grid is not to market, you end up having issues,” she said, pointing out the municipality’s issues with filling the director of operations position.
Fire department cuts
The fire department is in a hiring year, explained Chief Dan Callaghan, which means an increase of about $20,000 for wages and benefits.
Sammut asked why Callaghan was hiring when they have a volunteer group of about 60 people.
“These are replacement employees that we’re hiring right now. As you can imagine, with any work force you have employees coming and going, and a volunteer employment even more because they’re not highly paid, they’re requested 24 hours a day,” said Callaghan.
Sammut also commented on the $180,000 budgeted for supplies, materials and equipment.
Sammut noted the budget for the same line was around $188,000 last year, but actual spending was $140,000.
“Is there something you did really well last year that we can’t move forward and continue to do?” Sammut asked.
Callaghan said the budget has a lot to do with repairs, which is hard to predict. He added equipment for the new hires is included on that line as well.
“This year is a hiring year for us so we need that to provide equipment for new employees and that includes a pair of boots that fits that person,” he said.
Callaghan added, “Another thing that council has to consider is the Canadian dollar is at 68 cents right now. Everything that we purchase is coming out of the U.S.”
Alls suggested bringing that line item down to $160,000 and council agreed.
Gravel
Interim roads superintendent Dave Knight is looking for an extra $70,000 for gravel in this year’s budget.
He explained for the past three years the town had been using gravel donated to them from Hydro One.
Now that gravel has run out, and he is looking to replace the stores.
Alls said in the town’s first budget meeting there may be an opportunity for gravel in the future from Halton Crushed Stone if a portion of the 10th Line is closed, but Knight said that wouldn’t happen this year.
At the second meeting, Knight said the roads are going to take a beating this year with the freeze/thaw episodes this winter.
“I think we’re in for another tough spring coming up as far as tough spots in the road … that money comes out of my gravel money,” he said.
He added there are some roads that are in desperate need of gravel.
“We’ve got some roads right now that haven’t seen gravel in five years,” Knight said.
Council agreed it was important to leave that option in the budget.
The operating and capital budgets will be presented to the public on Feb. 16 prior to the regular council meeting.
