Council approves draft budget of two per cent increase

Posted Feb 16, 2012 By Kate Everson

EMC News - Quinte West - Council has received a draft 2012 operating budget for the city with an average of two per cent increase overall.

"Are there any more savings?" asked Leslie Roseblade.

Mayor John Williams replied, "A zero per cent increase does not work anymore."

Paul Kyte agreed that the city is "doing well."

However, Fred Kuypers said salary and benefits are "getting out of hand."

David Clazie, director of Corporate and Financial Services says the $320,000 increase in salaries only amounts to less than one per cent of the total budget. Even with the $120,000 increase of the OPP the increase would be 1.1 per cent.

Ron Hamilton said he was pleased with the tax rate, but said they must press the government to help with some projects.

Clazie reported that in the past four years the city's internal operating costs have decreased by $74,000, through various initiatives such as restructuring and inhouse contracts.

In 2011 the city finalized two significant employment contracts with CUPE (which represents the majority of the city's workforce) and the Full Time Professional Firefighters. The city also had legislated increases to OMERS pension plans which resulted in an overall increase in salaries and wages of $322,000.

"The largest component of these salary increases is in the fire department," he noted. Full-time firefighters were awarded a 3.25 per cent wage increase retroactive to January 1, 2008, as well as recognition pay. These items have added almost $170,000 to the city's annual salary budget.

In addition, council approved the hiring of a third fire prevention officer to help with the increasing workload and help reduce overtime. That position added $50,000 to the budget.

In 2011 council approved a two per cent wage increase for the next three years with the CUPE contract. This represents an additional $200,000 in 2012.

"As in prior years the cost of employee benefits has increased as well," Clazie said.

Clazie added that council has made some changes over the past year to help mitigate salary increases. The combining of the two executive assistant positions in the mayor's and CAO's office as well as the shifting of job duties in the customer service area resulted in $120,000 in savings. Changes in programming and day camps allowed reductions in part-time help by $50,000.

Materials and supplies costs have increased by $95,000. Fuel has increased by $120,000. Hydro has increased by $55,000.

The cost of debt financing has increased by $120,000 for public works projects.

The $800,000 from the base revenue Payment in Lieu of Taxes (PILT) will be added to the reserves.

"This is our highest reserve money, thanks to the base," commented Mayor Williams.

The city's external agencies have requested increases of $636,000. Of this increase, $460,000 relates to the OPP.

"Council approved the addition of two new sergeant positions," clarified Clazie. "In addition, the new costing formula increase for 2012 will add an additional $180,000 to our contract."

Other external agencies included Social Services and EMS with services provided by Hastings County projecting an overall increase of 1.5 per cent. The Bay of Quinte Tourism Council has requested an additional $25,000 and the Quinte Economic Development Commission is asking for $47,300 more. All of the other external agencies are coming in at increases of one to two per cent.

Clazie noted that without prior notice, the province has altered its funding calculation for OMPF as it relates to the number of households in the community. This will result in an unforeseen $500,000 decrease in funding. The mayor will be sending a letter to the Minister of Finance outlining the city's concerns.

"In order to offset this unexpected revenue decease, staff are recommending that we utilize funds from the city's working reserve in 2012 and 2013 in order to phase this into the tax base over the next two years," Clazie said.

The city's working reserve fund of $4 million is used to provide interim financing to the city between tax billings. Staff is recommending that the city repay this reserve fund over the next six years.

The impact on taxes is that Trenton Ward's increase will be 2.08 per cent, Sidney's will rise 0.87 per cent, Murray will go up 3.13 per cent and Frankford up by 2.72 per cent, for an average of two per cent.

"In 2013 and beyond, all Quinte West residents, regardless of which ward they reside in, will be paying the same general tax rate," Clazie noted. "The only items not in the general tax rate in 2012 are full-time fire (paid by Trenton Ward), urban street lighting (paid by Frankford and Trenton) and garbage. Frankford Ward still has its own landfill site and therefore these costs continue to be area rated."