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Covering the Parry Sound budget meeting notes is challenging. As I invest time and effort into the budget process I begin to feel as though I have some ownership, and don’t want to be too critical of the process, or the product. That’s typically not an issue for media who merely report the news, and impart any opinion by means of selective quotes. So, I’ll offer my take from the perspective of someone who cares about the budget, but hopefully doesn’t care too much.

There Will Be Substantial Tax Hikes

By substantial I am referring to increases that will raise taxes in the range of about 4% to 13%. The cause of the increases is two-fold. The first relates to a decision by Staff and Council to add a 1.8% infrastructure levy to taxes starting in 2017. In theory that increase will not ‘increase’ again the following year. While the 1.8% will impact all tax years going forward, once the increase is in the tax rate, it will not be increased beyond the normal annual increase going forward, let’s say 2% of 1.8%, for a net 0.036% increase annually. That’s small comfort, but the biggest shock will be in 2017. Overall I understand the need for the 1.8% increase. Some municipalities who have failed to invest in their infrastructure over the years will likely see as much as an 8% increase in taxes just to support infrastructure investment (that includes you Toronto). I support the 1.8% infrastructure increase. It’s so easy to push expenses forward for future generations to cover. We need to be take responsibility for our share, now.

The second reason for the rather variable increase in taxes has to do with the recent MPAC reassessment of properties. The 2016 MPAC reassessment resulted in the assessments for residential properties dropping by about 3%, commercial properties dropping by about 6%, and condominiums going up by 6%. (Note: the exact figures were presented last night but I wasn’t quick enough to write them down. I was told the figures will be available later in the week and I’ll put up a post after I’ve had a chance to look at them.) This means people in condos will be seeing the largest increase, close to 13%, while businesses may see no increase or perhaps even a slight decrease in taxes. The rest of us will probably be looking at a 4-5% overall increase in our tax bills.

Council Has Not Yet Come to Terms with the Budget

The meeting last night saw further discussion and explanation of the budget. There was not much ‘meaty’ discussion of the overall costs and some of the particulars proposed for 2017. It seemed that Council had come to accept that increased costs were inevitable and necessary. I support, and at the same time fault, this approach. My thoughts:

  1. Infrastructure: I have commented on this already, but as a Town we really can’t operate without good services, be it roads, water services, or other. We have been pretty responsible investing in infrastructure, but there is a need for more. That’s what the 1.8% is for. It too often costs more to repair repeatedly, and then eventually replace, rather than replace as part of an asset management plan.
  2. Jobs: The budget includes the addition of two new full-time positions. These positions are not part of the critical operations of Parry Sound but they will make a difference. There is also a plan for a 3-year contract position (Economic Development), which for at least three years is effectively a new full-time position. The question I have is: do we want, or need, the services that these positions will provide? I see the value in the positions, but do we want them? That’s an issue Council, with input from residents and businesses, needs to address. It’s like adding a built-in GPS to your new car for an additional $1,000. It sure would be nice, but do I need it? Can I afford it? What won’t I be able to afford if I add in the GPS? Do I just take a bigger car loan? We need to decide if we want to upgrade town provided services. My sense is that staffing increases should be tied to changes in total municipal assessments above the cost of living index. If overall assessment goes up it suggests that more services are required. In the absence of assessment increases then the addition of staff seems to be a means to improve the quality of service, not the quantity of service. Council needs to wrap their heads around this issue. The proposed additions, like a built-in GPS, can make sense. But do we really need it? I’m neutral on this.
  3. Debenture: The Town is considering a large number of capital improvement projects starting in 2017. Please refer to the budget documents to see what they are. The total figure for new 2017 debentures is $10.7 million. Most of the planned investments are necessary and reasonable so perhaps they need to get debentured in 2017. Sooner would seem to be better with the prospect of higher interest rates looming. Note: the debenture expense will add 3.5% to your tax bill starting in 2018. So while the 1.8% infrastructure increase will be ‘part of the tax base’ in 2018 and not represent an ‘increase’, it will be replaced by a 3.5% increase related to the 2017 debenture. If we want the benefits the debentures will support in the next two or three years, then I feel doing it now is the right thing.
  4. What Don’t We Need: The budget process largely revolves around new capital and service investments for the upcoming year. Do we add or improve this service? Do we build, or repair, this piece of infrastructure? At no point is there a discussion of whether some of the services we currently provide need to be scaled back or cancelled. It’s a bit like having a $120 TV and Cable bill. It’s basic service and a few premiums. When someone in the family makes a suggestion to subscribe to Netflix because they have unique content, do you just consider the $11 an additional monthly expense? Do you cut some of the premium offerings on your TV bill to cover the cost? Or do you figure that if you have Netflix you won’t need to go to the theatre and you’ll save even more? It’s so easy to add on new stuff. I know all about it. There is a philosophy of belongings that says for every item you buy, for example clothing, you need to get rid of something. An interesting approach if you have reached my stage of life where the necessities of life have been met. As a town, where are we? Are we adding or replacing?
  5. Rotary Algonquin Regiment Fitness Trail: This is an issue that perhaps encapsulates many of the issues facing Council, Staff and the budget process. As was mentioned last night the Rotary Algonquin Regiment Fitness Trail won’t be groomed by the snowmobile clubs this winter. The problem is that access over private property from McDougall has been denied so there is no way for the groomers to get to, and through, Parry Sound. I don’t know if that means the Town will prohibit machines on the trail. Even if the sleds don’t use the trail, it will not be groomed. This then led to the concern of some on Council about the stretch of town trail up towards the YMCA. Apparently people use that part of the trail to get back and forth to the Y. Without grooming by the snowmobile club, people will be forced to walk along Parry Sound Drive, a potential safety issue. The question was asked as to what could Staff do to keep the trail open. There is no obvious solution. The Town is not staffed to handle this new responsibility, nor do they have the appropriate equipment. So, is this something that gets added on? Should the Town shift resources from some other service the Town provides, perhaps less frequent sidewalk cleaning, to keep the trail open? It was casually suggested that to provide this service would require another full-time position, plus new capital expenses for equipment. In the end, it was left as something to be followed up. It highlights the challenges facing Council.
  6. The Downtown: There is a line item in the budget for Façade Improvement, that was chipped down to $50,000 from $60,000. Is this a nice to have or a need to have? Earlier this year the Town made parking free to aid the Downtown. That cost us, the taxpayers, about $100,000 a year in increased taxes and has led to some service cuts. The Town is also considering a $60,000 vacuum vehicle, a vacuum on a golf cart sized machine, that I expect is largely intended to service the Downtown. Nice to have or need to have? Do we really need to support façade improvement and a vacuum machine in addition to free parking? The tax bill for businesses mostly went down with the MPAC reassessment. Won’t the free parking increase business enough to allow them to invest in their own signs? Or was the whole premise of free parking a boondoggle?

Death by a thousand cuts. That’s perhaps the best way to convey my sense of the 2017 Budget. There is no obvious ‘lethal’ expense in the budget. Will the 2017 Budget build, or bleed, the Town?

Okay folks, it’s time for all of you to invest a little bit of time in the 2017 Budget. Look it over, it’s not that hard to understand, then put together your thoughts and share them with Town Council and Staff. What may seem obvious on first glance is often not so simple once you dig into the details. It’s also important to remember that the budget is intended to serve all of the Town’s residents and businesses, not your or my particular needs and interests.

I’ll post up a link to last night’s presentation when it is made available. Here’s a link to the last draft of the budget.