Thursday, October 2, 2014

Budget still could see trimming

The town’s 2014 operating budget could see some trimming in the coming weeks as council looks ahead to a future where either reduced services, or higher user fees or taxes, will become a necessity.
The 2014 budget currently includes an operating shortfall of about $360,787.

This amount is made up of an OPP contract increase to the tune of $218,000, as well as $127,800 to make up for a decrease in Ontario Municipal Partnership Fund dollars from the province.
This leaves only about $15,000 of the shortfall that the town has any control over.
But some other factors, such as the District Social Services Administration Board budget, which currently is being worked on, could have a further impact this year—just as further loss of tax revenue from the mill will affect next year’s budget and beyond.
All of this prompted discussion during Monday’s budget meeting as to whether council wanted to direct management to look again at trimming the operating budget.
Council was split on the subject.
“Management has done a very good job at bringing forward a budget to council,” said Mayor Roy Avis.
“And as we all know, council has different opinions—everybody does.
“My big concern going forward is that as we move through 2014, and some of the tax issues that we’ve been working with, with Resolute idling that complete facility, the ball is getting bigger as it rolls down the hill,” the mayor warned.
“And as the ball gets bigger, it’s a bigger cost.
“My feeling is, going forward, that we should make sure that everybody’s aware of that,” Mayor Avis stressed.
“Do we want to have high taxes and services the way they are at the present time, or do we want to have a little bit of a cut in service, a little bit of a sacrifice in order to keep taxes more in line?” he asked.
“Or do you want us to cut services to make sure that our taxes are at a very, very low rate?
“That’s what we’re faced with.
“The assessment, as it goes down on the industrial side, is being picked up almost totally by the residential side,” the mayor remarked.
“If you have a tax shift of a million dollars, can the residents afford that?” he wondered.
“What service level do we continue to have that’s going to be acceptable to everybody?”
Mayor Avis said that with the mill being idled, its assessment will continue to drop. By the year 2016, the total assessment of the mill could dwindle to $2.2 million.
By comparison, as recent as early 2008, the town’s large industrial assessment total was $26 million.
Mayor Avis said determining where those service cuts can be made is not easy as each contributes to the community in different ways.
For example, the Fort Frances Airport loses about $160,000-$170,000 a year but could be seen a crucial service.
Not only is it used for medical calls (medevac), but is used by locum doctors who come into town.
The town also has been told by New Gold that personnel will be flying in and out of town more and more as its gold mine project progresses.
Likewise, the Memorial Sports Centre is costly to run. But throughout the winter, it hosts many sporting events, such as the IP1 Jamboree this past weekend, which draws peoples from all over and is an economic boon for the town.
“Do you really start to cut those areas, or do you say that’s what we really try to promote?” Mayor Avis asked.
“Because we’re not competing against private enterprise,” he stressed. “We’re trying to compete with other communities and we’re trying to bring people here.”
Coun. Paul Ryan said he’d like to see some town divisions look at themselves and say, ‘We’re open at certain hours and nobody’s here.’
“‘Maybe we can adjust that a bit.’
“I’m not talking a huge cut,” Coun. Ryan stressed. “Say on $500,000 in operating costs above the take-in, say $30,000?
“Try to do $30,000 this year because next year it might be [$100,000], and I kind of think it will be.”
Coun. Ryan added the only town division that’s made big cuts during his tenure is Operations and Facilities.
Coun. Ken Perry noted that right now, considering most residents have seen their assessment go up, most are facing the equivalent of a nine-10 percent tax hike.
He would like to see a tax increase of one percent all in, which takes into consideration any changes to education tax, increased assessment, or other factors.
“Do we need some service cuts? Yep. Am I willing to put my neck in the wringer? Yep,” said Coun. Perry.
“We are looking at a massive increase in taxes,” he warned. “The assessment turnaround this year is $29.1 million from industrial/commercial back to residential if we’re going to keep the same collection process.
“The industrial and commercial went down $21.1 million, we went up $8 million residential,” Coun. Perry noted.
“That’s the difference.”
Fort Frances CAO Mark McCaig said any service cuts will have to be done through “a very thoughtful and consultative process because one of the things this community has going for it right now, moving forward, is the amenities that we offer.”
If council wants to throw those amenities out, he warned, council has to think about what it’s doing and whether people actually want them to make those cuts.
“It’s a short-term solution for a tax bill,” said McCaig. “Think about the long-term implications for a community that you’re trying to promote as something else, based on what you can offer in your town for services.”
He added these amenities are the reason doctors, lawyers, and employees of the New Gold mine would choose to live here as opposed to Alberton, Devlin, or Emo.
Coun. Andrew Hallikas said he realizes the town has been getting hit with costs which it has had no choice to pay, such as the OPP contract, but he can’t envision any service cuts that wouldn’t harm the town’s quality of living.
“If you cut beyond a certain point, then you start to cripple your organization,” he reasoned.
“And then down the road, that’s going to cost you money,” he said, adding he doesn’t feel any more can be cut from the 2014 budget.
Coun. Hallikas said council simply can’t achieve great savings from services such as the library and museum, as they each comprise two and one percent, respectively, of the entire town budget.
“The strategy going forward has to be something new, something bold, where we try and look at actually increasing revenue instead of decreasing costs,” he remarked.
“And how we do that is the question.”
Couns. Rick Wiedenhoeft and John Albanese agreed with Coun. Hallikas.
Community Services manager Jason Kabel stressed management “can’t do any more” to trim the 2014 budget without specific direction from council as to what they want to cut.
“We’re running as lean as we can,” he said. “Are we going to cut services for overages that aren’t within our control, from the OPP that says it’s going to cost a whack load more money to run this year?”
Kabel also said the message has to get out to the public that any tax increase passed onto them is due to uncontrollable costs.
In other budget news, council decided to approve several requests first made back in the fall.
For instance, the town will increase the Fort Frances “Meals on Wheels” operating grant from $18,500 to $19,000, as the organization had requested.
The town also will give $1,000 to the Boundary Waters Dragon Boat Festival, as it did last year and the year before.
This will not be in the 2014 budget but be taken out of council’s public relations budget.
Out of that same budget, council will give the local Salvation Army $500 to assist them with putting on a 100th anniversary celebration in April.
This community celebration will include a brass band from Bermuda.
But a request from the Fort Frances Chamber of Commerce for $10,000, for the purposes of marketing and providing tourism support for the area, was deferred until the town can more information.
The next budget meeting is set for Monday, March 17.

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