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Parry Sound Council and Staff held a meeting last night to review the latest changes to the 2016 Budget. It was an announced and open meeting that was attended by my wife and I, Moose-FM and the North/Beacon Star staff, plus TOPS Staff and Council. There were lots of empty seats. It seems as though you need to be paid to attend these meetings. The 2016 Budget deliberations will not be broadcast which suggests the need for some sort of method for recording the meetings that can be made available to the public. The doors to the meeting aren’t closed, but if they are hard to access, especially on a very snowy night, they may as well be closed for all practical purposes.

The 2016 Budget as presented in December required changes because of revised property valuations provided by MPAC that reduced the expected 2016 tax base, and revenues. The net/net was that about $240,000 needed to be carved out of the December budget. This figure was necessary to limit the tentative 2016 levy increase to 1.9%

After listening to the discussion last night, my opinion is that we are looking at a levy increase of about 3 to 3.5% if things continue as they seem they will. After reviewing the cuts to the December budget necessary to get in line with a 1.9% increase, as well as the cuts made late last year, to get to the original December budget, it seemed Council was in a mood to consider adding back in some of the cuts. Staff was tasked with preparing a prioritized list of items to be put back into the 2016 Budget and presenting them to Council at the next budget meeting (January 26th). Council appears to be warming up to a 3% increase.

It’s an interesting budget that tries to provide basic services, improve infrastructure, and at the same time increase the attractiveness of Parry Sound for residents and businesses. The 2016 Budget also acknowledges a significant loss of tax revenue from the Big Box stores, who received a Provincially mandated reduction in their assessed values. This is offset in large part by a reduction in the Town’s costs for policing services, to the tune of about $225,000 as compared with 2014. So the funds available to the Town are for the most part consistent with earlier years, a gain (policing costs), offset by a loss (Big Box tax revenues).

The net impact of any levy increase is worth understanding. Effectively, a 1% increase in the levy nets the Town about an additional $100,000. So a suggestion to raise the levy an additional 1.1%, to 3%, will bring in an additional $100,000 or so, representing a total 2016 increase of about $300,000 (with a 3.0% levy increase). That means your taxes will go up about 3%, plus any change in your MPAC assessed home valuation.

But the devil is in the details and I will be dissecting the 2016 Parry Sound budget in a series of posts over the next few days. It’s important to understand where the money is being spent, and I hope the posts will help people understand why taxes are likely to rise. If people don’t take the time to show up and listen to the debate, or study the budget documents, they don’t have the right to complain. You need to be involved if you want to be listened to.

A couple of quick reflections about the budget and last night’s discussion.

I see that the Town is still budgeting for a parking attendant in 2016, even though it is likely that we will have free parking. The cost of the attendant all-in is $72,000, that’s $45,000 for salary, and an additional $17,000 for an unspecified attendant related expense. A small portion of the parking attendant cost may be offset by fines. It may be argued that the parking attendant expense does not touch the 2016 Budget, and that’s true. The cost will be drained from a reserve. But once the reserve is drained you will see the expense added to your tax bill. Free parking should mean free parking and not come with an expense to the Town’s residents. For Free Parking to work for all residents expenses need to be limited, or eliminated. That $72,000 parking expense for 2016 is equivalent to about a 0.7% increase in your tax bill.

There was also mention that Parry Sound seriously consider investing the Town’s reserves, which represent several million dollars, in funds that have been earning almost double digit returns for some municipalities. All I can ask is – does nobody remember what happened to Orange County, California, when they tried to be ‘smart’ and earn a better return on their savings? Return is directly associated with risk. And risk is directly related to risk. There is no ‘free’ money. I’m sure our Director of Finance will nod his head when asked by Council about this high return option, do the necessary research, and return with a recommendation that we stick with less attractive but much safer investments.

So stick around, there will be more to come regarding the budget. My analysis will focus in on areas that I think people need to better understand. With an understanding of the 2016 Budget it will be the responsibility of the residents of Parry Sound to make their opinions heard if they expect Council to respond. In the absence of input Council will decide what they think is best. These are good people who do this as a part-time job, so offer constructive comments, not criticism. There are no easy answers, only tough choices.

Nuts and Bolts in a Different Light (Parry Sound in Colour)

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