Council argues over spending but adds to budget

Projected 6.3 per cent residential tax rate increase for 2014

By Barb McKay


Kincardine residents can likely expect a 6.3 per cent increase on their 2014 tax bill.


Prior to budget deliberations Thursday evening, Kincardine council faced a projected 3.9 per cent increase over last year’s residential tax rate. However, recent adjustments to the education tax rate for industrial properties decreased municipal revenues by approximately $130,000, adding another 1.5 per cent to the residential tax rate, putting it at 5.48 per cent.


Treasurer Roxana Baumann said the situation is not expected to get better in subsequent years. The municipality retains education taxes from Bruce Power and assessments for that type of industrial property do not increase. She said the province is working to phase in a decrease in education taxes from industrial properties, which means Kincardine can expect further reductions.


“Basically, the upper levels of government are balancing the books on our backs and we are hurting because of it,” said mayor Larry Kraemer.


As council began its third deliberation over the 2014 municipal budget, councillor Randy Roppel said council needs to prioritize its capital projects, then commenced a war of words with Kraemer.


“You and this council are living beyond your means on the capital side,” Roppel said. “You are making this municipality live beyond its means with all these capital projects.”


“You are as well, Randy,” Kraemer fired back. “You are sitting at this table as well, making these decisions.”


Councillor Jacqueline Faubert pointed out that when council first began its budget deliberations in December it was already facing a five per cent increase to the residential tax rate due to provincial downloading and reduced revenues from OPG for development fees. She said Kincardine still has one of the lowest residential tax rates in the county.


“We can go around in circles at this table but until we start addressing some of these issues that’s all we’ll do.”


Faubert said the municipality needs to start thinking about selling more of its buildings and consider reducing the number of council representatives.


“If we want our roads paved, state of the art facilities, our sidewalks plowed and clean water, we have to get creative,” she said.


Kraemer said that the municipality is trying not to raise taxes, but it simply isn’t allocating enough money to capital from the tax rate.


“We are raising $800,000 to pay for $5.3 million in capital,” he said. “All the rest is coming from savings. You can fight this fight all day long, but at the end of the day that’s not going to go away. That is the math. Either you tell people the truth or you dance around the matter for the rest of your days.”


Councillor Candy Hewitt said when BDO Dunwoody presented its auditor’s report last year it reported that Kincardine does not have a sustainable budget because it is taking money out of reserves and not putting enough back in.


“We have a big, beautiful municipality and we have a responsibility to maintain what we have,” she said.


Baumann said the municipality currently has approximately $4 million in discretionary reserves for capital requirements, including roads, bridges and buildings. There are separate reserves for water and sewer.

She said the municipality should be setting aside $7 million each year to pay for future asset and infrastructure replacement; 10 times what it currently allocates.


Councillor Maureen Couture said there is nowhere to cut on the operating side, unless the municipality reduces staff or cuts services.


“We have to look at how we pay for capital in the future if we don’t take it out of the tax rate,” she said, adding that the municipality has to pay for roads and other infrastructure from somewhere.


However, on Thursday council continued to pull money from reserves. A motion by deputy mayor Anne Eadie to allocate $15,000 towards the development of a noise nuisance bylaw from reserves rather than from the tax base was passed. The money, however, is expected to be replaced with development fees from future wind energy projects (Armow). Council also agreed to take $150,000 out of the Ward 1 reserve for the Kincardine Lions Club’s splash pad project.


Councillor Randy Roppel said he would like to see money put away for public washrooms in Inverhuron. Eadie said she would like to see a committee established to come up with options to replace the Whitney Crawford Community Centre (WCCC) in Tiverton and set some funds aside for that.


Councillor Ken Craig agreed and made motions to establish a $40,000 reserve fund for a preliminary study for the WCCC and a $50,000 reserve fund for the Inverhuron pavilion, which could include washrooms. Both motions were passed.


The additional $90,000 on the budget put the residential tax rate increase up to 6.32 per cent. Council is expected to finalize the budget during the Feb. 19 council meeting.