Use of Dysart reserve funds cuts tax levy increase

By James Matthews, Local Journalism Initiative Reporter
Finance staff expect Dysart’s treasury to have finished last year with a surplus.
An initial draft of the 2024 municipal operating and capital budget on Dec. 8 included an almost 13 per cent increase to the tax levy for about a $40 increase for every $100,000 assessed to a property.
But opportunities were identified to avail of some reserve funds that cut that increase almost by half, said Barbara Swannell, the township’s treasurer.
With those opportunities, Swannell delivered a second draft of the budget to council on Jan. 12 that limited the tax levy increase to 6.48 per cent. If accepted, that will represent a tax bill increase of just under $20.50 for every $100,000 a property is assessed.
Council agreed to defer the final say on the budget until the Jan. 24 meeting.
Swannell said she anticipates a working fund balance of about $1.5 million.
“We anticipate a little bit of a surplus,” she said. “What that value would be at this point, we’re still working towards that.”
Dysart saw new growth of about 1.7 per cent in 2023.
“Which is pretty high, by the way,” said Mayor Murray Fearrey.
Swannell said the municipality had an additional $64-million of additional assessment value.
In order to achieve the second draft’s lower tax levy increase, Swannell said staff recommends using money in reserve funds to offset the need. That would mean using $450,000 from the working reserve funds, she said.
“Based on the reserve fund policy, our working funds exceed the current target limits,” she said. “So this is where we’re pulling from that surplus.”
Another $250,000 would need to be taken from the capital roads reserve fund. That would require a commitment from council to replace that money next year, in addition to the usual annual reserve fund contribution.
“I want to make clear here that we’re not robbing a reserve that isn’t over what it’s anticipated that we should have,” Fearrey said. “We have extra money in the working funds?”
Correct, Swannell said.
“So if you’re going to give somebody a break, that’s not a penalty,” Fearrey said. “But we do have to put the $250,000 back, right?”
Right, said Swannell.
“Otherwise we won’t have money to buy equipment,” Fearrey said. “So that’s a thought. That’s one way of doing it.”
The mayor said taxpayers have braced for an increase as the prices for everything from Hydro to labour, materials, and gas has risen.
“We definitely have to have more money to operate,” he said. “I think people will understand that.”
Given the rate of growth in the past year in Dysart, Fearrey said the required levy increase would likely be seven or eight per cent without the new money that’s been injected into municipal coffers.
“We all benefit from that extra growth,” he said. “That’s pretty amazing growth. I wouldn’t count on that another year. I think it’s going to go a little down.”
Councillor Carm Sawyer suggested council consider cutting anticipated road expenditures in half, which would decrease by $1.1 million.
“But the typical problem you face is you pay now or pay double later,” Sawyer said.
“We’re going to have to do some borrowing in this council term,” Fearrey said. “There’s no doubt about it.”
Major expenditures at the township’s landfills are on the horizon, he said.
The municipality can “probably” borrow at 4.5 per cent interest from a bank “I’m hoping,” Fearrey said.
He suggested the township borrow for six months or a year so there will be enough time to see what’s going to happen with interest rates.
“If the Bank of Canada drops the rate by half a point, even, it’s a big deal when you’re borrowing for 40 years on three or four million bucks,” he said.
The lion’s share of tax dollars at 44 per cent of the purse in 2024 will be spent on transportation services. Environment services and protective services chew up 17 per cent and 16 per cent respectively.
“That represents 77 per cent of the municipal budget,” Swannell said.
“Unfortunately, that’s what’s got to be done,” Fearrey said.
Afterwards, Deputy Mayor Walt McKechnie said: “All of us have got to realize there’s a lot of needs out there in our community.”
McKechnie said people have said to raise the tax levy by 10 or 15 per cent. But the majority of people can’t afford that kind of an increase in these uncertain economic days.
“And that’s who we’re supposed to try to take care of,” he said. “The majority of the people. I think this budget is very fair to a lot of people.”
He said he accepts the proposed 6.48 per cent tax increase.
“Is everybody okay with that to keep the roads the same?” Fearrey said. “We either do it now or do it later.”
“I don’t think we can take away from the roads because we’ll never catch up,” Sawyer said.