- this range will allow Council to see what projects/services could be
included in that range and later make a decision on the final figure -
by Sylene Argent
On Tuesday evening, members of Essex Council met virtually to participate in a pre-consultation meeting for the 2022 Budget.
CAO Doug Sweet explained the meeting was a way for Council to give direction as to whether or not there would be a tax increase, which will assist administration in preparing the 2022 Capital and Operating Budgets for future deliberation.
The proposed budget range will be discussed during initial budget walkthrough meetings scheduled for late November.
The meeting also provided Council with an overview of fixed expenses anticipated for next year.
For 2022, administration assumes Council wants to provide, at a minimum, the same-level of service as 2021, Sweet said. To provide the same-level of service as 2021 for next year, Sweet said the Town has some increased and fixed costs that administration has no control over.
Increases to expenses are due to Consumer Price Index (CPI or inflation) on utilities (3.7 percent), insurance (20 percent or around $120,000), annual salary (1.5 percent), and new debt payments. There is an increase in projected revenue, such as growth per MPAC predictions.
Kate Giurissevich, Acting Director of Corporate Services/Treasurer, said in 2016 and 2017, the Town’s tax rate increases were close to, or above, inflation. Since 2017, however, the Town’s tax increases have been below the CPI or inflation line.
Sweet said to maintain the same-level of service offered in 2021 next year, it is just over $350,000 or a 2.26 percent tax increase.
“If there is a zero-percent tax increase, Administration would have to reduce Operating Budgets, or level-of-service, by approximately $350,000. To meet the same level-of-service offered in 2021, and with the projected increase in revenue and fixed costs, there would need to be an approximate 2.26 [percent] tax increase,” Sweet explained.
A one-percent tax increase would equate to around $156,000 additional taxation revenue.
Giurissevich explained a three-percent tax increase, if Council decided on that number, on a median home assessed at $187,000, would equate to an increase of $51, from $1710 in 2021 to $1761 in 2022 for the homeowner. This would not include County or School Board increases.
In addition to fixed expenditures, Sweet noted Council is considering adding a Traffic Enforcement Officer at $190,000, and around $140,000 additional dollars will be needed next year to cover expenses for the 2022 municipal election.
Sweet said administration is recommending Council provide a range of two-percent to four-percent increase in the 2022 Budget, to account for the CPI increase at a minimum.
“If we have a range, it gives us some flexibility on what we can present back to Council and the level-of-service that range would provide,” Sweet said.
Mayor Larry Snively asked about tax revenue income from the prior year and where the Town stands percentage wise, as there has been a lot of new building. Giurissevich explained what she can provide is the projected revenue for 2022, including growth, which is expected to come in at around $16M. 2021’s Budget was $15.9M. This is accounting for an around $148,000 increase.
In providing an increase-range for Administration to work with, Deputy Mayor Richard Meloche suggested a 1.75 to 2.5 percent increase.
Councillor Chris Vander Doelen agreed with Meloche. Zero is better, though, he said, as taxes are high. If one-percent is added, people struggling are crushed. Councillor Morley Bowman said the top-end should be at three-percent, based on the numbers provided. Councillor Kim Verbeek also agreed with Meloche, but did not want to see services suffer.
Councillor Steve Bjorkman said there is nowhere to cut when it comes to service. It is important members of Administration be able to present options, and Council can deny it later. He was in favour of going up to three-percent for that reason. He added Council can look at the Capital Budget to support Operations. Councillor Sherry Bondy also agreed with Meloche’s range, noting residents want to see some projects get done.
Meloche made the motion that the increase range Administration look at be between 1.5 to 2.5 percent. At Budget, Council has the potential to increase the percent, if it desires.
The motion passed with a majority vote. Bjorkman and Bowman opposed the motion.
Bjorkman and Bowman were not in favour because they believed administration should be able to present up to three-percent for Council consideration. Bjorkman said if Council later decided to go up to three-percent, Administration will have to do additional work.
Vander Doelen supported the motion, but noted he would prefer it only went to two-percent. With more houses being built next year, he suspects an increase in tax revenue in 2023.
Administration will now prepare Operating and Capital Budgets for the initial 2022 Budget deliberation meetings with Council in late November.