Budget 2022: The Good, the Bad, and the Money
Tonight, in a 6-1 vote, Council adopted the following resolution, putting in place the municipality's 2022 operating budget:
THAT Council of the Town of Fort Frances approve the Operating Budget increase of $318,840 for 2022; and
FURTHER THAT the Municipal tax rate increase is 3.49%, which includes a reduction of the Large Industrial Tax ratio by one-half of the difference between the 2021 ratio and the Industrial ratio; therefore reducing it to 4.663262.
I was the lone vote opposed to the budget (more on that later). I also opposed the capital budget, which was approved on January 31, for reasons I outlined previously.
But first, the most important question...
What do these numbers mean for your tax bill?
To put the numbers in the above resolution into context, it is important to understand that the percentage increase is not the same for all classes of property. As you will see in the material on tonight's Committee of the Whole agenda, the impact is different on each class of property, in accordance with a series of ratios.
For most taxpayers, the key question is "how much are my taxes going up?" The answer to that question is provided in the Treasurer's materials, which indicate that:
Residential properties assessed at values between $0 to $100,000 will see an average increase of $61 over the year (2,044 out of 3,078 residences in Fort Frances fall into this category); and
Residential properties assessed at values between $100,000 to $200,000 will see an average increase of $78 over the year (946 out of 3,078 residences in Fort Frances fall into this category).
To put this in perspective, I asked the Treasurer during tonight's meeting how much money Council saved taxpayers when we asked staff to make cuts to this year's budget during our last meeting, 2 weeks ago. Staff were able to identify $109,000 in savings, and this had the effect of lowering the average increase to a residential tax bill by just $18.
In short: significant retractions in service would be required to cause further savings.
(Sometimes constituents ask why taxes need to go up at all. I have written about that in previous budget cycles, and encourage you to read about it here and here.)
What are the highlights in this year's budget?
The big, strategic decision from this year's operating budget was to phase out the municipality's large industrial tax rate over the next 2 years.
The large industrial tax rates applied to properties like the former mill. In past decades, many northern municipalities introduced these large industrial rates - and set them at high numbers - in order to keep more of the economic benefit in their community from resource-based industries operated by large multinationals. At the time, this tax base carried a sizeable assessed value, and returned significant tax revenue to the mill towns.
As the footprint of paper mills has shrunk over time, these rates have become a challenge for attracting new industry because they are not competitive. Fort Frances and Dryden have, by far, the highest large industrial tax rates in the region. You can see these figures in the January 31 presentation made by the Treasurer. Check out the bar graph.
These high tax rates have become a problem for attracting new industry because investors can locate in municipalities with much lower tax burdens. Fort Frances has very little assessed value in this category right now, but by phasing out this taxation class, that burden will shift to other ratepayers. Now is the ideal time to make this adjustment for the specific reason that the value of the properties in this class is so little, meaning that the burden to be shifted is small.
I support this decision, and I am pleased Council selected an accelerated timeline of two years to get it done.
Why didn't I support the budget?
I voted against the capital and operating budget because, as a package, I felt strongly that they overlooked certain priorities, and spend too much time and resource fiddling on policies and strategies instead of taking action on what our citizens are demanding today.
To be clear, I support transitioning away from the large industrial tax rate. I support the efforts that are being made to prioritize economic development and modernization. I support the project to enhance the Phair Avenue Park, which is something that started when I put on an executive committee agenda in 2021. These are positive initiatives.
My concern is that there has been an under-prioritization of investments to attract and retain young families, and an over-prioritization of bureaucratic overhead and paper-pushing. In my view, Council continues to write blank cheques to professional service providers, while abdicating its oversight responsibilities for these expenses.
I will provide some examples:
Tens of thousands are budgeted for a governance review later this year that should very well be able to take place in-house, with the expertise of this Council and staff and the benefit of an already-expanded legal budget for what little work needs to be outsourced. I am concerned that this review has been timed to coincide with the installation of a new, inexperienced council that may not be equipped to guide it. This could further erode the leadership role and influence of Council if not conducted properly. This exercise, in my view, could wait until after the new Council is in place and learns the ropes. In the meantime, many urgent and obvious governance reforms could be implemented now without the use of these additional resources.
$56,000 was spent last year on legal fees in connection with the Point Park litigation, and $100,000 is budgeted for this year. There has been no evidence of any progress on that file, which is part of the reason I resigned from the related committee back in June 2021. In my view, we do not have sufficient oversight of value for money for this work. This is a matter all members around this table campaigned on as a priority, and I am disappointed we have not seen more positive development. I have been specifically obstructed when I have requested invoices and records to substantiate what, exactly, taxpayers are paying for on this file.
The Town continues to use a closed meeting investigator that costs us money, when the provincial Ombudsman provides the same service, more consistently and transparently, for free. This information was never provided to Council at the time this contract was awarded, and no RFP was conducted to make sure taxpayers were getting a good deal.
The Town continues to pay inflated fees for the use of an integrity commissioner that could be controlled by simple changes to the municipal code of conduct or by doing a proper tender for these services - which, again, has never happened. This is another proposal I have raised which has not been pursued. In fact, the executive committee which could kick-start this work had its meeting cancelled today.
I am concerned that we are spending money on all of these items that do not return direct value to our citizens, yet for some reason we expect volunteers to pick up the slack, and spearhead the development of new public amenities, like a splash park for the community. That doesn’t make any sense to me, or the voters I have explained it to.
For these reasons, I did not support the budget because this is one of the last opportunities that this Council will have to make its mark on the municipality, and I am concerned that this budget has not risen to the occasion as much as it should.