A pre-budget discussion in Minto is giving council and staff a lot to think about.
The municipality is going to have to slash $400,000 from its 2010 budget, and even at that, it will mean a 3% hike to the municipal portion of tax bills.
“We knew we couldn’t do everything we wanted to get done,” said Treasurer Gord Duff.
Items likely to be dropped or deferred for the coming year include a lot of projects not already committed to because of federal and provincial grant allocations. The overall value of those capital projects is roughly $4-million, “and all are related to municipal infrastructure,” Duff said.
While there may be some smaller projects and items still to be considered, “It’s only going to be a little bit here, and a little bit there,” he said. “We might have to slightly lower our standards where we can.”
Duff added some of the projects being deferred were already deferred by at least a year. He believes such items can be put off for a short time, but it could come back to haunt them.
It already has.
Duff pointed out in 2009 budget deliberations, he told council decisions made then would require considerable commitments in the 2010 budget. He said the municipality may need to look at means to increase its revenues, such as changes to its fees and rates.
He said Minto is facing something “virtually every municipality in Ontario is facing” to some degree. The one thing he does not want to see is dealing with the current situation by borrowing more money.
Minto is already facing a debt load of $12-million and “debt servicing is a big cost,” he said.
However, even though the town has a large debt, Duff explained most of it can be attributed to infrastructure costs – for projects which could last 40 to 50 years.
He expects councillors and staff to have many more meetings before finalizing a budget.
Typically, it is not until February or March before the town gets its final figures to determine if the previous year ended in a deficit or surplus.
And, he added, “Usually we do not pass a final budget until April.”
Deputy-mayor Judy Dirksen also expected the meeting to be one of many. Duff said the budget he presented is very preliminary. One of the major assumptions he made was the 2009 year would end without a surplus or deficit.
“A huge deficit will make our job tougher, and a surplus would make it a bit easier,” he noted. It also makes the assumption that the assessment base will remain stable.
“If we can somehow increase our assessment … wonderful. My target is a 3% increase,” Duff said.
Last year, the levy was roughly $3.4-million, so he is hoping to limit it to $3.5 million in 2010.
The preliminary budget, as it stands, has a 12% increase.
“I would say that especially in recreation and public works, the budgets are pretty lean.”
For the fire department, he said the biggest increase includes rescue equipment.
Fire Chief Chris Harrow said the compressor replaces the 1982 unit used to fill the airbottles used by firefighters.
“We kinda need to update that.”
Other items such as modern radio equipment needs to be done.
He said for cemeteries, “We basically did nothing [for capital items] in 2009.”
In recreation, he said he and Recreation Director Dave Stonley originally started with a $900,000 budget.
“It’s now about $500,000.”
However, Duff said, “What we have in here is basically nothing for Clifford [for capital projects].”
He cited projects slated for the Clifford community hall for 2011. “There’s going to be some tough decisions, whether we keep the hall going or not.”
He added that Stonley maintains that the $50,000 for a recreation master plan will be money well spent because it gives a blueprint for future recreation spending, and the best use of the facilities.
“There’s some issues that need to be dealt with, and this will better arm us to make those decisions,” Stonley said.
Duff said under new regulations, a master plan would be considered as operating costs and not a capital expense.
In Harriston, for the arena, the only spending slated is part of infrastructure grant work.
Duff said in the 2011 spending projections is much of the work originally slated for 2010.
“I don’t want to mislead you; its not that in 2011 millions of dollars are going to appear. It’s just deferring it a year, and we’ll have the same problem.”
He said there is a multi-year plan for the train station. The town had hoped for an accessibility grant, but it never came in. The upgrades are required and the building needs attention. Only $55,000 will be covered in reserves, and another $25,000 is needed.
Stonley said the project has already been deferred for two years.
Duff said some work has been done on the Harriston town hall, but more is needed.
With Palmerston being the biggest facility, small scale work is projected, plus some work at the Palmerston pool.
In economic development, councillor Wayne Martin suggested the $238,000 cost for the educational centre at the Palmerston train station can be removed. “It’s old News.”
He said the cost of a portable has been priced.
Duff said that is a decision to be made, especially for items not covered by grants.
He said Palmerston recreation looks high, but without the Lions Park it is not that bad.
Duff said even with the leanest recreation budget he has seen, it is still over $500,000 – much of which is committed through various projects tied to grant funding.
As he had told council earlier, “The issue is coming up with our share.”
He said there will be future costs to upgrade some computer software that is being phased out by Microsoft. The phase-out means there will be no more support of the program.
Other items include records management software.
He said the building department is one of the simpler and easier parts of the budget. Capital costs are relatively low, and a truck for the department has been deferred again.
Economic development is one of the most discretionary parts of the budget, and one of the hardest to forecast, Duff said. He added it is also one of the areas where the township has unexpended reserves, so it will not have a major impact on taxes.
Duff said money allocated to streetscape work is viewed as an investment in the communities.
In general, we have some work on the industrial parks.
He added there is a lot of work that the town would like to do in the Palmerston industrial park, but that is unlikely unless additional grant money comes in, which is unlikely to happen this year.
At this point, Duff said if grant opportunities arrive, the town would need to weigh them carefully – and maybe even turn them down because of the impact it would have on the municipality raising its own portion of the funding.
Realistically, Duff does not see the town pursuing some projects or borrowing more money.
He noted that in roads, there are three major projects depending on 50% funding with neighboring municipalities.
He said work on Kim’s walkway, in Harriston, has been deferred for a few years now.
The Ayton Road was in the preliminary 2009 budget, but using gas tax funds and other funds, the town could get about $350,000 of work done.
But Duff said, it’s really a $700,000 project.
“We can do half of Ayton Road. That would deal with the worst two kilometres.”
He added the budget projection does not include nearly the same amount of road work. The town had already spent $65,000 on the Arthur Street bridge in engineering costs.
He said there is $400,000 in the budget, and he is hoping for an MTO grant.
“If we’re unsuccessful, we have another $400,000 problem.”
Roads Superintendent Norm Fisk said of the Arthur Street bridge work, a funding announcement was made, “then it was taken away from us because we weren’t going to be able to use it within the deadline they set – March 2010.”
Fisk said “there was no way we could meet that deadline because you can only work in the river from June to September. The announcement was in July. It was impossible to even get a tender out. So they took it away. If they don’t give us more money, maybe we should just put a load limit on it, and see if they (MTO officials) like it.”
Mayor David Anderson asked if the municipality has the authority to do that.
“Sure we do,” Fisk said.
“It’s not something you want to do on a main highway, but if they’re not going to help us fix the bridge – they were going to help, then took it away from us.”
Duff agreed it is a provincially significant highway.”
Council is prepared for a number of meetings to hone the 2010 figures.
