Last week Callander’s council held a special meeting to discuss the 2023 budget. Municipal staff presented two possible options for consideration. Find a chair, Callander ratepayer, because the first option was a 12.75 per cent increase to the tax levy, and option two, although a little lighter, rang in at just under eight at 7.79 per cent.
However, hope remains, as council was not thrilled with either option, and Mayor Robb Noon emphasized “there’s no way we’re going to have a 12 per cent increase in the tax levy.” Ideally, he thinks council and staff can wrangle that number down to a more palatable 5 per cent.
They have time, as council doesn’t plan to pass the budget until March. However, some decisions will have to be made to reduce those numbers to the 5 per cent range.
See: Callander’s budget calls for a tax increase of 1.96 per cent
Callander’s budget hovers just under eight million dollars. To prepare this budget, council had staff change tactics during its draft. Usually, municipal budgets are created using historical data. Specifically, the historical costs for the past three years would be averaged, and two to three per cent would be added to that number.
For example, gas prices from the past years would be plugged into this year’s spreadsheet. Same with insurance rates, or construction material for new rink boards. Add that two or three per cent, too. However, since costs have risen so drastically over the past years, staff looked to current prices to forecast expenditures throughout 2023.
This increased projected costs, as did the new capital plan for the Downtown and Waterfront. The idea is to phase in those increases to the capital plan, “by reducing the number of capital projects” municipal staff explained, while ensuing the town “remains on target” with its projects.
Padding the reserve fund is also a priority for the municipality. According to its Capital Asset Management Plan—the document that outlines the expenses the municipality will have to maintain future infrastructure and assets—the town must contribute $1.5 million every year for the next ten years. For the past four years, about $1.1 million has been added annually.
See: Callander’s insurance rates on the rise
That 12.75 increase represented an ideal world, where all the planned capital projects would continue on schedule, and the promise to fill the reserve fund would be met. This increase would allow all plans and visions to be carried out.
However, staff and council realize the toll “is quite substantial, and staff have been actively reviewing capital projects, contributions from reserves, and operational expenses to determine whether any further modifications can be proposed.”
Enter option two, the 7.79 per cent increase. This would reduce the ideal reserve contribution of $1.5 million. It also reduces the number of capital projects, and the deferral of capital projects, such as the Eglington Road South project, and the postponement of the new docking system for a year, which would save around $100,000 in 2023.
Decisions must be made as to which projects are delayed of deferred. Another way to reduce the tax rate is to use reserve funds, which would counter council’s desire to augment reserve funds. However, if council decides to go that route, staff warn dipping into the reserves “cannot be a practice that is used annually year after year, as the reserves will be depleted rather quickly.”
Certain projects can be outright eliminated, “however,” staff note, “this would result in an inconsistency with the Capital Asset Management Plan.”
All in all, staff explained that this budget draft represents “a very conservative operational budget increase, given the current economic climate.” As council wants to lower the rate to the 5 per cent mark, it will need to keep juggling numbers and make some hard decisions.
The staff warn council that “any less than a 5 per cent budget increase” for 2023 “could cause financial hardships that may be difficult to rebuild without significant assessment increase in the future.”
David Briggs is a Local Journalism Initiative reporter who works out of BayToday, a publication of Village Media. The Local Journalism Initiative is funded by the Government of Canada.
