Council approves budget with 2.99% increase

At a special council meeting Monday, the town’s 2022 operating budget was approved, with an increase over last year of 2.99 per cent. 

The capital budget was approved  by council in December.

Coun. Allan Bisback, chair of the budget committee, called it the “maintenance budget 2.0,” because for the second year, COVID and other issues required staff to make tough decisions to keep to a small increase, including limiting the transfer to capital reserves and holding off on capital projects.

It’s not a sustainable budget, but it’s a prudent one, said Bisback, adding the only way to have a sustainable budget in the future is to look for new revenue sources.

“It’s reasonable cautious, and it reflects the current reality of our environment.”

Treasurer Kyle Freeborn said in his presentation to council that some of this year’s pressures include staff salaries, volunteer firefighter compensation increases, insurance increases, inflation at about a 4.5 per cent increase, legislative requirements, and COVID-19 measures.

In October, staff was asked to keep the budget increase in the range of two to five per cent.

They’ve reduced it twice since then, the first time from a 13.20 per cent increase, then after budget committee deliberations to a 10.40 per cent rise, and finally to 2.99 per cent, with a general levy of $13,670,566, up $543,793 from last year. With $151,187 in assessment growth, this year’s budget will cost taxpayers $1,216, or $44.08 more than last year, for an average residential property pegged at $536,960.

With a storm water management levy requirement of $879,443, up from $456,998, the average residential property tax for an urban taxpayer increases to $1,338.64, with an increase of $53.17 over last year on the average tax bill, for a total increase for those urban properties of $97.25

This year for the first time, made easy with new budget software, staff looked at a four-year historical trend, and was able to reduce the budget by $365,000 through reduced reserve funding, including the legal fee reserve.  

The “solid investment” in the storm water management program, Freeborn explained, is to fund regular cleaning of storm ponds, which hasn’t occurred for several years in NOTL, allowing them to fill with debris. The increased cost will continue through future years to allow the ponds to function properly, as intended, meeting all the legislative requirements, he said.

Reducing the increase to 2.99 per cent, Freeborn said, was chiefly a result of staff brainstorming sessions, which he referred to as the “dragon’s den,” with each department revising their costs to find savings.

The largest reductions were from the operations department, for items such as road maintenance and parks and recreation facilities.

Legal fees were budgeted at $500,000, and in response to a question from Coun. Erwin Wiens, about a possible decrease, Freeborn said “I hope so.”

A 15 per cent increase to transit covers the cost of four vehicles instead of two, he said, in answer to a question from Coun. Wendy Cheropita.

Coun. Gary Burroughs made a motion to defer the $15,000 rainbow crosswalk until 2023, to allow for more public discussion.

Although there was public consultation on social media, “it didn’t have a huge response,” he said, and there has been no discussion with the public about where the crosswalk would be located. Burroughs intended his motion to defer the decision until budget discussions of 2023, “once we have more detail on location.”

He said NOTL “has a history of being supportive of all groups. Now we’re coming up with something that is making a statement about what? That’s what I’m unclear about.”

In the end, his motion was changed to include consultation about the location of the crosswalk, as well as five rainbow benches, to be scattered around the municipality, but not to put it off until 2023.

One of the main discussions Monday was over the municipal accommodation tax.

The budget committee, which includes Couns. Norm Arsenault, Allan Bisback, Gary Burroughs, Sandra O’Connor and John Wiens, had considered and approved a two per cent tax on accommodations of five rooms or more, with increases to three and then four per cent in the coming years, to fund a $100,000 commitment for the NOTL Museum expansion. Council had already approved the tax in August, but tied it to an overall tourism strategy, which is expected to take 12 to 18 months to complete, with only preliminary steps taken so far.

In December, when council discussed the capital budget, some councillors voted against funding certain items with the municipal accommodation tax, including the museum expansion, and that part of the budget was not approved.

They were concerned that the timing is wrong for such a tax, as the tourism industry hasn’t had time to recover from the pandemic, and also that tourism stakeholders have not been consulted or part of the discussion.

Three items in the 2022 capital budget which were expected to be covered by the accommodation tax were funding for NOTL Tourism’s Icewine Festival; a $100,000 Victoria Street beautification project; and $100,000 toward the NOTL Museum expansion, one of five payments over five years to honour a $500,000 commitment.

The Icewine Festival has been cancelled due to COVID restrictions, and a contribution to the spring event organized by the NOTL Chamber of Commerce, 13 for 13, will be funded through parking reserves, council agreed.

The Victoria Street project is on hold, and council moved forward with the accommodation tax to fund $100,000 for the museum in 2022.

There were two presentations before the budget discussion, one from Paul MacIntyre, the chair of the NOTL Chamber board, and also vice-president of operations for Vintage Hotels, the other from Janet Jones, representing a chamber committee, the  NOTL Tourism Advisory Working Group.

They both asked that, given the acceptance of the municipal accommodation tax as a done deal, a governance committee be created to involve tourism stakeholders, in discussions of how the tax will be administered and what it will fund.

They both requested time for operators to work out a process to collect the tax. Jones said she hoped it could be put off until the 2023 budget, and objected to council approving funding for a project before any money has been collected.

A motion by Arsenault to approve the accommodation tax was approved, at two per cent this year, three next and four per cent the year after on five rooms or more, to be instituted July 1, that reserve accounts be established, and that there be consultation with the accommodation providers over the next several months.

Arsenault called the goal of the motion to approve the tax was to create “a placeholder.” There is no money for a MAT reserve, and when there is, it will be available as a funding source for the museum expansion, an initiative council has approved, he said.

Bisback, who has supported an accommodation tax from the beginning, said if the $100,000 for the museum is deferred for a year, “we have to find $200,000 in 2023.” As a museum board member, he added, he believes the commitment toward the capital budget to be “extremely important,” allowing the museum to access funding from upper levels of government.

And since the majority of visitors to the museum are tourists, “it’s a typical cost for a MAT to cover.”

Coun. Clare Cameron spoke passionately against the motion to fund the museum expansion with a municipal accommodation tax. “It’s the wrong time, given the state of the tourism industry and how very precarious it is going into the third year of a pandemic,” she said.

Cameron said she couldn’t support putting the tax in place until a tourism strategy is in place, and also because of the disruption it would cause to the accommodation sector when guests are already being booked for this season.

“My preference would always be cooperation instead of coercion,” she said, “and I’m very uncomfortable with how this has come to the table, as if we have cotton bolls in our ears. I feel there is something very coercive about this.”

To add to the problem, “we’ve recently lost our head of Tourism NOTL and president of the Chamber of Commerce (Eduardo Lafforgue has resigned, effective the end of the month) who normally would have been a key stakeholder with this, which makes the time seem even more off for me.”

Cameron said she is also uncomfortable with the way “it conflates this need for a MAT with the funding for the museum. I feel we’re being forced to choose between the municipal accommodation tax and museum.”

If it was levy-supported, it would increase the budget hike to 3.75 per cent “completely within the original guideline. If we want to show our true support for the museum, and not use the museum as a lever to pass this tax, we should build more support for our beloved museum on the levy, where it belongs.”

A further motion, this one by Coun. Wendy Cheropita, was approved to more specifically address the tax, calling for the creation of a governance advisory group made of seven or nine tourism stakeholders, selected by staff to assist in the design, governance and process for the program, without holding up its implementation in July.

Key initiatives supported in the budget to advance council’s priorities, Freeborn said Monday, include the tourism strategy, planning workshop action items, the heritage conservation district expansion study, the transportation master plan and the former hospital site initiative, which has called for proposals for use of the building.

Drivers for the 2022 budget, Freeborn told councillors, include advancing service delivery initiatives, improvements to the town website; developing a framework toward a sustainable budget; and ensuring environmental stewardship in decision-making.

The goal with this year’s budget principles haven’t changed from 2021, councillors heard — to maintain core services, while minimizing the impact to taxpayers; delivering on current commitments and obligations; protecting town assets; continuing to successfully address COVID-19 impacts; and a new one this year, advancing the priority initiatives of the town.

New studies for 2022 include an asset management plan, planning items including rezoning of Old Town, additional funds for the Heritage Conservation District Plan, planning process mapping, a secondary plan design guide update, review of Official Plan winery policies, review of the pros and cons of a community planning permit system, and some enhancements to the application policy to the Official Plan.

New studies also include a character study of the Randwood Estate and a recreation master plan.

Voting in favour of the budget, Lord Mayor Betty Disero said, “it’s not sustainable, but we’ll get there.”