Penetanguishene residents will have one less thing to worry about in the new year --- a tax increase.
According to treasurer Carrie Robillard, there actually may be good news once all aspects of taxation are taken into account by next March.
"Overall, we're anticipating (by the end of March), net impact of zero per cent or below in terms of year over year tax impact." she told council Tuesday evening. "We may be in a position to give money back to taxpayers."
That good news came on top of the news that staff had managed to bring back a draft budget with 1.4% tax increase, which is slightly less than the 1.5% council had asked staff to target.
The town’s overall 2021 budget includes a zero per cent policing tax impact and a capital tax impact of 1%. The total 1.4% represents an increase of $159,360 for the overall 2021 budget, of which only 0.4% or $49,930 is related to operating budget increases and 1% or $109,430 is due to increased capital taxation investment.
Despite the positive news, council members still had questions around certain parts of the presented draft budget with Coun. Dan LaRose wanting to know what the town is applying to its debt reduction.
Robillard said she would include the exact amount in the next budget presentation, schedule for Dec. 8.
"I can let you know this evening that the fire department debenture is only a partial payment this year and it's finished," she added. "We also had a new debenture for our main street to be paid out of taxation. We were supporting it over the last few years through our asset management reserve, until such time as that fire debenture is paid in full.
"Then we're going to reallocate some of those debenture reduction funds from fire to public works. But we are also going to keep some in the fire budget in terms of transferring it into a fire reserve to fund future equipment replacement."
Coun. George Vadeboncoeur had questions about road surfacing programs, specifically around McArthur Road and Polish subdivision.
"I think the cost is $200,000 and it's scheduled for 2024," he said. "Having driven down McArthur a few times, I know the challenges of keeping out of the potholes. It's a difficult road to maintain. Do you think it can last 'til 2024?"
Public works director Bryan Murray replied that the Polish subdivision road has been maintained as a gravel road since its construction.
"We've put it in as 2024 for surface treatment, which is a double surface treatment similar to what was done on another sideroad a few years ago...a surface treatment coupled by a slurry seal on top of it," he said. " It looks similar to an asphalt surface, but it is a surface treatment.
"We do get a little bit of extra life out of those treatments. This surface treatment is a chip seal similar to what you would find on Gordon Drive or Brunelle Side Road. We're proposing to improve the surface to eliminate ongoing maintenance."
Coun. Brian Cummings asked when do maintenance projects become capital projects.
Robillard said the capital program is a tangible capital asset or an improvement to a tangible capital asset.
"It's really for larger items as well as true tangible capital assets, whether it's equipment, a facility or roads," she said. "We do not have a distinction in our capital program. If it's a higher ticket item or one-time item, we don't want it in our operating budget because of the fluctuation of tax impact on our residents."
Coun. Jill St. Amant wanted to know how staff was budgeting or planning to budget for improvements to the existing recreation centre facility or the building of a new one.
CAO Jeff Lees responded that it would depend on the consultant's recommendations.
"From our perspective, we didn't want to speculate too much about how the report might come out and how council might want to go," he said. "The feasibility study we're going through is a long-term plan. We don't anticipate there's going to be much impact in 2021. We need to start planning for the future and that would be our intent as we know a little bit more from council as to what path we're going down."
Vadeboncoeur then questioned staff about COVID-related relief funding the town had received.
"We did get a COVID grant for 2020 and the amount could be carried forward to 2021 for any additional expenses related to COVID," he said. "How are we allocating those funds and are we going to bring any of those funds into the 2021 budget?"
Robillard said the money is available to offset any potential year-end increase of costs and impact of reduced revenues.
"We have implemented cost efficiencies to offset any deficit," she said. "The grant was good news, but we don't allocate it for specific purpose. We're just going to use at year end to offset any potential losses. We were notified that any unused amount that is not required in 2020 can be carried forward to 2021 to offset COVID implications."
Moving forward with relief measures, Cummings asked about the latest announcement by the province around giving businesses relief from municipal and education taxes.
Robillard said she didn't have a lot of information around the announcement, but said she believed the program will first tackle municipal property tax relief for businesses in hotspots like the Greater Toronto Area and Ottawa.
"Just recently, we got correspondence related to province-wide tax relief for businesses," she said, adding there isn't yet clear information around the program.
"Generally, they are looking to reduce the education rates for the portion of business education taxes that some of the larger municipalities pay. The decision could be put in the hands of each municipality to offer what that might look like versus a province-wide relief or reduction from business tax. In terms of education, the province has offered a few ways to allow us to offer some of that relief without it impacting us directly."
A further draft of the budget will be brought to council at its Dec. 8 meeting.
Mehreen Shahid, Local Journalism Initiative Reporter, OrilliaMatters.com