Duane Hicks
While the Town of Fort Frances nearly is done with its 2010 budget, council will have to wait until next week to see whether or not there is a change in the funding apportionment formula for the District Social Services Administration Board.
Depending on what district municipalities and unincorporated areas want, the DSSAB board will decide whether to change the formula at a meeting next Thursday (April 15).
If the formula stays as it is, it may mean a 2.4 percent tax increase to residential property owners.
But if it changes, that levy will jump to 3.578 percent.
At a budget meeting here Monday, council mused about the budget process and what might happen.
“I am very impressed with where we’ve started, how much we’ve done, and what we’ve come down to—a 2.4 percent tax increase . . . without any cut in services whatsoever,” said Coun. Rick Wiedenhoeft.
As Mayor Roy Avis stated in his column in the March 24 edition of the Fort Frances Times, Coun. Wiedenhoeft echoed the town has many uncontrollable costs for things such as social services, public health, and policing, which have to come out of every tax dollar it collects, and “sometimes things are beyond our control.”
“If we get hit with Option #3 from DSSAB, it’s a very unfortunate circumstance, but I still believe we should maintain, without any more significant cuts, the level of service that we provide to this community, and go ahead with the [3.578 percent],” said Coun. Wiedenhoeft.
“I am sorry, but it’s something that’s almost beyond our control.”
Mayor Avis said he’s hopeful the DSSAB funding formula will stay the same, and any tax increase kept to a minimum.
“The big concern we have right now is if they change the apportionment for DSSAB, then that will reflect a larger increase,” he remarked.
“At that time, council’s going to have to go back and review the budget and see if we can take more out of it.
“I, myself, feel we should talking about a two percent increase—the rate of inflation for this year,” the mayor added.
Coun. Paul Ryan said he’s “not holding [his] breath” on the DSSAB decision coming out in the town’s favour.
Coun. Andrew Hallikas admitted “there’s not a lot that we can do about that right now,” but hoped the funding formula remains status quo and the residential tax increase remains a “palatable” 2.4 percent.
Another change in this year’s budget is that due to a decrease in the education levy, as well as changes in the assessed values for various property classes, some classes will see an increase in levy but a decrease in the amount of dollars paid.
Tax scenarios
If the DSSAB funding apportionment formula remains status quo, council has looked at two possible scenarios to balance the budget.
The first scenario would result in the following:
•a 2.4 percent levy increase for residential, which equals a net tax dollar decrease of $0.13 per $100,000 of assessment;
•a 2.6 percent levy increase for multi-residential, which equals a net tax dollar increase of $16.64 per $100,000 of assessment;
•a 0.96 percent levy increase for commercial, which equals a net tax dollar decrease of $592.99 per $100,000 of assessment;
•a 1.04 percent levy increase for industrial, which equals a net tax dollar decrease of $99.61 per $100,000 of assessment;
•a 1.17 percent levy increase for large industrial, which equals a net tax dollar decrease of $875.27 per $100,000 of assessment; and
•a 2.04 percent levy increase for pipeline, which equals a net tax dollar decrease of $576.60 per $100,000 of assessment.
A second scenario using alternative commercial/industrial tax ratios would result in the following:
•a 2.4 percent levy increase for residential, which equals a net tax dollar decrease of $2.33 per $100,000 of assessment;
•a 2.61 percent levy increase for multi-residential, which equals a net tax dollar increase of $11.04 per $100,000 of assessment;
•a 0.967 percent levy increase for commercial, which equals a net tax dollar decrease of $594.13 per $100,000 of assessment;
•a 1.04 percent levy increase for industrial, which equals a net tax dollar decrease of $77.75 per $100,000 of assessment;
•a 1.17 percent levy increase for large industrial, which equals a net tax dollar decrease of $835.40 per $100,000 of assessment; and
•a 2.04 percent levy increase for pipeline, which equals a net tax dollar decrease of $582.14 per $100,000 of assessment.
In both of these scenarios, the town is looking to generate $224,286 to both pay for an operating budget deficit of $107,054 and $117,232 for the principle and interest on long-term debt.
However, if the DSSAB formula for the apportionment of costs changes, town council was presented with a tax scenario that would have much more of an impact on some local taxpayers.
This scenario would see:
•a 3.58 percent levy increase for residential, which equals a net tax dollar increase of $21.16 per $100,000 of assessment;
•a 3.89 percent levy increase for multi-residential, which equals a net tax dollar increase of $70.78 per $100,000 of assessment;
•a 1.43 percent levy increase for commercial, which equals a net tax dollar decrease of $570.82 per $100,000 of assessment;
•a 1.55 percent levy increase for industrial, which equals a net tax dollar decrease of $70.38 per $100,000 of assessment;
•a 1.74 percent levy increase for large industrial, which equals a net tax dollar decrease of $821.97 per $100,000 of assessment; and
•a 3.03 percent levy increase for pipeline, which equals a net tax dollar decrease of $523.02 per $100,000 of assessment.
In this scenario, the town would generate $333,282 to pay for an operating budget deficit of $216,050 (which is more than $100,000 higher than the other two scenarios because of the change in DSSAB apportionment costs) and $117,232 for the principle and interest on long-term debt.
