Council met on September 17 and 18 to hear from staff across all departments about the driving forces shaping the 2020 budget. The main themes will be prioritizing the timing of capital projects and remaining resilient in the wake of known and potential funding cuts and reorganization of service delivery by the province.
Ron Taylor, CAO, summed up the discussions by noting, “We have a 2020 capital budget that is very ambitious at almost $50 million. It includes a number of new and significant projects that invest in our roads, downtowns and parks. Council has acknowledged the need to prioritize projects in light of many unknowns at the provincial level. The timing of capital projects will be critical to ensure we stay on course with our financial plan in order to keep services affordable for residents.”
Jennifer Stover, Director of Corporate Services, outlined that the tax increases for the first two years of the municipality’s long term financial plan have come in under the 4% target, at 3% (2018) and 2.85% (2019). Council is constantly working to balance ratepayer affordability with maintenance of our programs and service levels.
“Our long-term financial plan, which Council should be commended for adopting in 2017, is built to support financial sustainability and to act as a guide for decision making. It helps us manage the over $3 billion in assets we own and maintain according to Council’s set service levels. We are leveraging every opportunity for grants and alternative funding sources while keeping our debt ratio and reserve funding at healthy levels,” commented Stover.
Stover compared the Financial Plan to a household budget, noting that the municipality’s ‘house’ includes hundreds of assets, each at differing ages and stages of repair. The household budget needs to be flexible to adapt to the changing funding landscape that affects the bottom line.
“With respect to the provincial cuts, it’s similar to having a house that needs new windows and a furnace in the same year as one of the income earners loses their job. We have to prioritize spending to ensure we take care of the urgent needs first and put away as much as we can for the future,” Stover noted.
Regarding the operating budget, Stover confirmed that Council directed staff to bring forward 4% and 0% tax increase options, to start to understand the pending impact on service levels resulting from provincial funding reductions. Pressures on the operating budget include provincial cuts across child care, social services, long term care and paramedics. Ongoing provincial funding cuts are on the horizon and all municipalities are being asked to do more with less.
The increased number of weather related events has put an additional $1 million pressure on the budget. In the last several years, winter control budgets have increased and been outpaced by the demands of mother nature. As an example, the 2019 budget is already fully spent after the heavy winter and spring seasons, with October through December still to be accounted for.
Mayor Letham commented, “Realistically we don’t expect a zero percent budget, but it’s important for Council to see what options we have and which services would be impacted by any cuts we make. We can’t simply pass the provincial cuts on to our residents, nor can we make up the difference without some changes. We are committed to working with the province to find better ways of delivering services.”
Stover also confirmed that the long term financial plan projections for a 3% increase in water and wastewater user rates for 2020 will be met.
Earlier this year, Council directed all agencies and boards, such as police, library, airport and conservation authorities, to bring their 2020 budget requests in at a zero percent increase from their 2019 budget.
Mayor Letham concluded, “Costs are going up far greater than inflation. The ultimate goal is to keep services affordable for residents. We will need to make some changes to achieve this.”
Next steps for the budget include a review of Board and Agency budgets on October 29 and a proposed budget release of November 1. A special evening meeting will be held in Fenelon Falls on November 12 to hear from the public.
The full budget process schedule and supporting documents with overviews of all departments’ 2019 accomplishments and 2020 objectives can be found on the municipal website at www.kawarthalakes.ca/budget. Watch the Budget Overview presentation on You Tube.