The following letter was sent to Mayor Milt McIver, Deputy Mayor and Councillors of the Municipality of Northern Bruce Peninsula
Re: 2022 Budget commentary
Your 2022 Budget timetable includes an invitation for public input between November and January as it has in previous years.
Below is a transcript of our formal letter to Council dated February 15, 2021 for inclusion on the February 22,2021 Council Meeting Agenda with respect to draft #2 of the 2021 Budget.
We can all agree that circumstances were far from ideal, most particularly when it came to your mandated virtual Council meetings. That said, we feel strongly that our input to the 2021 Budget process did not receive thoughtful consideration and response by members of Council.
In attaching our letter at this time, we urge you to reflect on the points made in our letter, particularly with respect to management of the Municipality’s Reserve Fund and the manner in which it is funded.
A response from you to our suggestions would be greatly appreciated.
Respectfully submitted by the executive members of ST. Edmunds Property Owners Inc. David Almack, Kevin Doyle, Carrie King, Dave Hartney, Tom McAfee, Udo Nixdorf and Jack Schenk
Transcript of correspondence dated February 15, 2021.
To Mayor Milt McIver and Council of the Municipality of Northern Bruce Peninsula
Dear Mayor McIver and Council.
RE: 2021 BUDGET, Draft #2
For inclusion on the February 22, 2021 MNBP Council Agenda
We, the executive members of St. Edmunds Property Owners, Inc. are concerned with several aspects of the 2021 Municipal Budget, Draft #2 that was passed by Council at the virtual, Special Council Meeting on February 8th.
The lack of debate during the February 8, 2021, Council meeting.
Aside from two clarifications involving the Tobermory sewer system and a particular road construction project reserve, there was no debate amongst Council members or department managers as to whether the tax rate increase of +5.66% (2020 +1.45%) and tax levy of + 6.01% (2020 +3.85%) is the best that can be done in the interest of the municipal constituents.
What is your justification for any tax increases when the 2020 Consumer Price Index was only 1.6% and many people and businesses are in dire economic peril during this Covid-19 Pandemic?
Nor was there any discussion or debate over the burgeoning Reserve Fund with a 2020 closing balance of $13.228 million versus the estimated closing balance of $10.175 million. In fact, the Reserve Fund has increased each year from $6.082 million in 2016 to the current amount. It is entirely at the expense of tax payers for which there is no strategic plan as to how much is enough and how much is too much. The anticipated Reserve Fund closing balance in the 2021 Budget is $11.873 million. Looking at the current 2021 Budget draft this looks to be a fictitious number and the true amount will be closer to $15+ million, again at the expense of the property tax payers!
Why does the Reserve Fund keep increasing year over year with no clear plan or end in sight?
You may argue that a healthy Reserve Fund is good to have to deal with “rainy days” but without any strategy or guidance leaves it vulnerable to abuse and misuse, particularly in the manner that money flows into the Fund. The source is primarily from the Operating side of the budget that is funded from taxes. In each year that we have reviewed budgets, the process is the same in that the amounts budgeted have no correlation to what is actually spent year over year with the predictable excess amounts flowing into the Reserve Fund. For the department managers there is never any risk of exceeding the budgets as the amounts are set unrealistically high. This does very little to encourage efficiency and fiscal responsibility, which we feel is only prudent.
For 2021, the budgeted tax revenue increase of $525 thousand will be largely generated by the increase to the tax rate of +5.66% since the property assessment re-
at least for this year. Therefore, most tax payers can expect a 5.66% increase in Municipal portion of their property taxes.
We feel that council should have encouraged management to come up with a zero-rate increase budget for 2021 without any financial risk to the municipality short term or long term. We encourage you to still do that!
Respectfully submitted by the Executive Members of St. Edmunds Property Owners Inc.
The supporting spreadsheet, “MNBP BUDGET OBSERVATIONS 2016 – 2021” can be accessed at https://sepo.ca/wp-content/uploads/2021/02/MNBP-Reserves-2016-2021.pdf
