Tax levy projected to rise 6.5 per cent in Huron East

BY SHAWN LOUGHLIN

Huron East Treasurer Paula Michiels has presented the first draft of the municipality’s budget with a proposed general municipal levy increase of 6.5 per cent.

Michiels spoke to the budget at Huron East Council’s Feb. 16 meeting, noting a marked change from the budget preview she provided council at its Feb. 2 meeting. At that meeting, she told council the budget included a five per cent increase to the levy, which was as high as she was comfortable going. However, the budget wouldn’t cover inflationary costs and Mayor Bernie MacLellan said he felt council should, at the very least, be covering the cost of inflation in its budget, even if the COVID-19 pandemic had been hitting residents hard.

As a result, Michiels implemented the proposed increase, providing an additional $331,487 of levy revenue for the municipality. The first draft of the budget remains unbalanced, however, with a deficit position of $567,110, although that has been cut nearly in half from Michiels’ budget preview, which included a shortfall of $1.1 million.

While the municipal levy will differ by ward, the general increase is set at 4.36 per cent in the draft budget, which includes special area-rated costs, along with a proposed 1.54 per cent increase to the Huron County budget for Huron East and a 1.37 per cent decrease to the education levy. Those three budgets result in an overall levy increase to Huron East residents of 2.30 per cent.

She said the tax levy increases would impact each of the municipality’s five wards differently and, while the numbers would change on the way to balancing the budget, they would range from a 0.36 per cent tax increase to just under six per cent, with the Grey Ward being hit the hardest.

This came after Michiels detailed numerous budgetary pressures on the municipality this year, resulting in a shortfall of over $200,000 before budget deliberations even began. The shortfall came as a result of a reduction of over $90,000 to the municipality’s Ontario Municipal Partnership Fund (OMPF) allocation and an increase of nearly $125,000 to its annual insurance premium.

In the 2021 budget, the growing deficits of the community centres continue to be a concern for the municipality.

Michiels has proposed a slight reduction to two of the three centres’ special deficit reduction levies. The Brussels, Morris and Grey Community Centre’s special levy will be $38,061 in 2021, which is down from the $44,005 it received in 2020. At the Seaforth and District Community Centre, the special levy will be $43,889 in 2021, compared to nearly $62,000 in 2020. The Vanastra Recreation Centre’s special levy of $20,208 in 2021 is the same amount it received in 2020.

Those special levies come to the centres in addition to a three per cent increase to the base levies. However, all three centres are expected to see their deficits grow by the end of the year, despite the increase to their base levies and the continuation of the deficit reduction levies.

Michiels projects that the Brussels, Morris and Grey Community Centre will end 2021 with a deficit of over $127,000, compared to its deficit of $109,769 at the end of 2020. The Seaforth and District Community Centre is projected to end 2021 with a deficit of $177,397, which will increase from its deficit of $170,773 at the end of 2020. The Vanastra Recreation Centre, which is home to a pool, but no ice surface, ended 2020 with a surplus of over $32,000, but is forecasted to end 2021 with a deficit of over $17,000.

In her report, Michiels attributed the swing in the Vanastra centre’s budget to the unpredictability of 2021, saying that the centre often does very well in operating within its annual budget.

The Brussels, Morris and Grey Community Centre budget, Michiels said, was originally much higher, but after a meeting between Michiels and the centre’s facilities manager Abi Corbett, as well as direction from the Brussels Recreation Committee, it was cut significantly. Michiels said the budget dropped some paving work at the Brussels pool and sports fields, as well as the replacement of a pair of doors at the centre.

She also touched on the Vanastra Early Childhood Learning Centre, which has also been a monetary concern for council for a number of years. She said that, despite nearly $100,000 in savings in 2020 because the centre did not operate and some layoffs due to COVID-19 control measures, the centre is projected to end 2021 in a deficit position of just under $137,000.

Michiels also detailed a small increase to the municipality’s economic development budget in 2020, which includes an additional $10,000 to implement a community improvement plan in Seaforth.

Michiels also told council that a report from staff would be coming soon regarding provincial COVID-19 relief funding. The municipality had about $200,000 in government funding available at the end of 2020 and received another $48,000 from the provincial government in 2021, meaning Huron East has nearly $250,000 in funding to spend by the end of the year.

She said staff will be proposing some potential ways to spend the money, but also cautioned that the municipality has the whole year to spend the funds and further costs related to COVID-19 are sure to crop up over the course of the year.

MacLellan spoke first to the budget, saying council needs to find a solution to the growing issue of the community centres. Having carry-forward deficits that continue to grow, despite special deficit reduction levies, is not sustainable on a long-term basis, he said. He was also concerned about the growing deficit at the Vanastra Early Childhood Learning Centre.

Michiels said it would be possible to use some of the provincial government’s COVID-19 relief funding to offset lost revenue at the Vanastra childcare centre, as long as she could justify it.

With over $567,000 still left to cut in order to balance the budget, Michiels will be presenting a second draft of the budget to council next month.