Kincardine looking at 2.65% rate hike in first glance at 2018 budget

Kincardine council is looking at a 2.65-per-cent tax rate increase, for municipal purposes only, as it had a first glance at the 2018 budget, Wednesday night (Dec. 13).

During her presentation, treasurer Roxana Baumann said the draft budget consists of operating expenses of $27.6-million which includes a lifecycle reserve fund contribution of $2.46-million. Taxation revenue of $16.024-million would be required to off-set these operational costs. The remaining $11.651-million in expenses is funded through a combination of grants and contributions, user fees and charges, interest and other non-tax revenues.

She said a tax rate increase of 2.65 per cent would be required to raise the $16.024-million in revenue to meet operational expenses. “In comparison to the 7.3-per-cent rate increase that was required in the prior year, the proposed increase for 2018 is more in line with inflation.”

Baumann said the draft capital budget includes $10.182-million in high-priority projects, as well as an additional $5.727-million for the Connaught Park sewage project which is being carried over from 2017.

She noted the following factors in lowering the tax rate increase for 2018:
 

• Increase in the Ontario Municipal Partnership Fund (OMPF) to $1,149,100 which is $107,800 higher than in 2017
• Policing cost adjustments for 2015-16 which reduce the amount payable in 2018 by $147,000
• Higher estimated revenue for bag tag sales and landfill tipping fees of $73,000
• Higher estimated revenue for the Davidson Centre arena rentals, summer camp, and health club memberships by $42,000
• Higher office rental revenue of $34,000 at the municipal administrative centre and the Underwood office due to the Bruce Power Major Component Replacement project
• Shift to revenue-neutral cemetery operations is estimated to increase non-tax revenue by $32,000

There are also the following factors contributing to a higher tax rate increase:
 

• $356,300 increase in wages and benefits, of which $87,000 is attributed to the increase in minimum wage, effective Jan. 1, 2018
• $120,000 in physician incentive payments that are not off-set by a reserve fund contribution in 2018
• $78,000 increase in hydro costs, of which $24,000 is attributed to the leachate treatment facility
• $30,000 for phragmites expenses that are not off-set by a reserve fund contribution in 2018
• $15,000 for ash tree removal due to the Emerald Ash Borer
• $10,000 for estimated integrity commissioner costs
• $10,000 for a grant to the Kincardine Reunion committee

Baumann said the draft operating budget includes a reserve fund contribution toward infrastructure replacement, for a total allocation of $2.46-million. This is $440,000 higher than in 2017 and was raised by a three-per-cent increase in the tax rate, as well as the estimated $50,000 dividend from Westario Power.

The draft budget also includes a $500,000 allocation to establish a new fleet replacement reserve fund. The estimated Bruce Telecom dividend is being used to fund this reserve fund.

Baumann said the capital budget includes 53 high-priority projects, as well as four in-progress projects carried forward from 2017:
 

• $4.24-million – water and sanitary servicing of Ontario Provincial Farms lands behind the Sutton Park Mall, to be recovered from future development charges
• $999,000 – UV disinfection system (water)
• $955,500 – servicing upgrades to the Highways 9 and 21 lands
• $785,000 – Kincardine Waste Management Centre Stage 2 cell expansion
• $400,000 – replacement of fire tanker truck (in 2019)
• $280,000 – replacement of plow/sander
• $280,000 – replacement of tractor/loader
• $275,000 – Dunsmoor Park washroom renovations
• $200,000 – Kincardine Lighthouse restoration (final phase)
• $150,000 – new work order software (water department)
• $150,000 – Bruce Energy Centre water tower coating and repairs
• $150,000 – inspect and rebuild high-lift pump (Kincardine Water Treatment Plant)
• $140,000 – upgrade Huron Terrace/Durham Street pumps
• $127,500 – website redevelopment
• $135,000 – asset management program

Baumann reminded council that every one-per-cent rate increase equals $130,000 in added taxation revenue, and equates to $15 per year for the average residential household assessed at $244,000. She said an overall tax rate increase of 2.65 per cent is required in 2018 in order to maintain the existing service levels in the municipality.

Each department head then went through his/her 2018 objectives and budget summary.

Council will consider this information and continue budget deliberations at the next meeting, Jan. 15, 2018, at 5 p.m.