Budget will see residential tax rate increase by 4.78 percent

By Ken Kellar
Staff writer

Ahead of the Town of Fort Frances finalizing an enshrining its 2023 budget into by-law, town treasurer Dawn Galusha once again fronted a public meeting intended to show where municipal taxes come from and how they are used to keep the Town of Fort Frances running.

Speaking at Monday night’s meeting of town council, Galusha presented a number of slides intended to break down the budget and show how 2023 will differ from what the town had in place for previous years.

Like previous budgets, Galusha explained the 2023 figures began with town management and administration preparing estimates and in-depth reviews of the estimates, before those figured were brought together and compiled into a full, detailed budget package that was presented to council for review and discussion. Galusha note that part of council’s role was to not only consider the administrators estimates, but to also determine what level of services to maintain, and how to go about doing that.

“Each year, Council has a difficult task of trying to balance the needs of the community, maintain acceptable service levels and make every effort to strengthen our local economy while then providing fairness in taxation and value in service to our residents,” Galusha said.

“The future of the industrial class tax base for mill properties is still unknown, but it’s a great opportunity for the town to be reinvented. The town continues to be impacted by escalating operating costs as well as aging infrastructure and the growing infrastructure deficit.”

The Town of Fort Frances has four main sources of municipal revenue that includes taxation, conditional and unconditional grants, user fees, licenses, permits and fines, and other forms of revenue like penalties, interest, rent, and land and equipment sales. Property taxes make up the main source of revenue for the municipality, and Galusha noted that the general operating budget for 2023 led to an increase in most tax rates across the board from their 2022 counterparts, including residential tax rates. Council sets the tax rates based on the estimated revenue needed to operate and maintain town services and infrastructure.

“The impact to the tax rates takes into consideration both the municipal and education portion of the tax rate,” she explained.

“The residential impact being 4.78 percent [increase] and commercial 4.16 percent [increase]. In 2022, council committed to a reduction of the large industrial tax ratio by one half of the difference between the 2021 ratio and the industrial ratio. For 2023 a final reduction was applied, making the large industrial ratio equal to the industrial ratio. The large industrial ratio then sees a large decrease of 37.15 percent in order to get to that large industrial rate.”

What this means for almost every homeowner or business owner in Fort Frances, then, is an increase on their tax bills from 2022. Applying the residential tax rate, a homeowner with a current value assessment of $100,00 will be paying $1,946.51 in 2023, up $95.77 from 2022, while those with a current value assessment of $200,000 will pay $3,893.02, which is $191.54 more than last year, and a homeowner with a current assessment value of $300,000 will see an increase of $287.30 in 2023, bringing the total to $5,839.52 for this year.

Mayor Andrew Hallikas did note that of the residential tax rate, the province mandates that 1.4 percent must be put into a municipal asset management plan.

The increase to tax rates for most classes in town ties back to the overall budget, which for 2023 has been revealed as $44,611,173 according to the slides included in Galusha’s presentation to council. The operating expense portion of the budget is $22,461,462, with the remaining $22,149,711 of the budget being made up of capital, water operating and sewer operating budgets.

Also included in the budget breakdown, the town’s uncontrollable expenses for 2023 ($5,008,105) increased by only $321 over 2022’s expenses ($4,998,782), owing to a reduction in the town’s policing contract that is then mostly made up by an increase in the payment made to the Rainy River District Social Services Administration (RRDSSAB).

Galusha noted the town has just over $23-million in reserve funds as of the end of 2022, which each year is used to provide financing, future replacement or acquisition of capital assets, as well as to provide flexibility to the town in managing its debt.

“Building our reserve funds is primarily accomplished through the application of annual operating surpluses and operational budget allocations to sustain asset management strategies,” Galusha said.

“In 2023, we have allocated $2,187,900 to corporate vehicles/equipment, projects and building reserve funds and $48,169 to the post landfill closure reserve. Any water and sewer surplus goes to the water and sewer reserves, and this year we are estimating it to be $2.6-million. Also the Canada Community Building Funding, which was formerly the Federal Gas Tax Capital Funding, of $512,230 is directed to reserves first and then used within the capital budget.”

Galusha went on to note that if all of the town’s pending grants are received, and all scheduled projects for the year are completed, the reserve fund is estimated to stand at $20,970,972 for the end of 2023, along with the town’s working capital reserves of $1.5-million.

Galusha’s presentation to council was also part of opening a public meeting to allow for input from the public in the form of written submissions or oral presentations, of which there were none. It also provided a review of the budget as it currently stands, before the appropriate by-laws to finalize the budget for 2023 are brought forward at the next council meeting scheduled for April 24, 2023.