Huron East budget process begins with projected $1.1 million shortfall
BY SHAWN LOUGHLIN
Huron East Treasurer Paula Michiels has recommended a five per cent increase to the municipal levy as a jumping-off point to budget deliberations.
Michiels said she would provide councillors with the first draft of the budget at the Feb. 16 meeting with the final draft to be considered at the March 16 meeting. She did, however, provide councillors with some high-level points of her proposed first draft, including her target tax levy increase.
Michiels told councillors at their Feb. 2 meeting that, given the financial hardship brought about by the COVID-19 pandemic, she wasn’t comfortable proposing a tax levy increase of greater than five per cent. However, in order to simply cover funding losses and rising costs, council would have to approve a 4.1 per cent increase. This means, she said, that would only represent a 0.9 per cent increase to the tax rate after factoring in those losses, which wouldn’t even cover the full rate of inflation.
The cuts, Michiels said, include a reduction of over $90,000 in the municipality’s Ontario Municipal Partnership Fund (OMPF) allocation and an increase of $122,000 to its insurance payments. There was a net decrease in the municipality’s policing costs, which hasn’t happened in recent years, so the municipality finds itself $208,000 short of its 2020 position before budget deliberations begin, she said.
Despite the proposed five per cent increase to the tax levy, Michiels told council she would still need to cut $1.1 million in order to balance the budget. As a result, she told councillors they would have to either cut services, defer projects or utilize reserves in order to cover the shortfall.
Those figures only take into account the municipal portion of the budget, she said. Huron County Council has yet to take major steps towards its budget process, with a full-day budget meeting scheduled for Feb. 11.
Though council wasn’t due to debate the budget at its Feb. 2 meeting, Mayor Bernie MacLellan said he wasn’t comfortable keeping the tax rate increase that low, saying council needed to at least be covering inflation and budgetary increases in order to avoid massive holes in years to come.
He also said that, after nearly 10 years of OMPF cuts from the provincial government, they have now levelled out, so the municipality wouldn’t have to anticipate large-scale cuts in future budgets. That being said, “kicking the can down the road” was a mistake with funding stabilization just one more year away.
He told council that if the municipality were to cover its costs this year and then keep up with inflation and important projects in the years to come, that would be good budget planning that he would support.
Michiels will present the first draft of the budget at council’s next meeting, set for Tuesday, Feb. 16, beginning at 7 p.m. The meeting will be held virtually via Zoom.