First look at 2010 budget

SOUTH DUNDAS – Little growth, lost tax revenue, decreased funding and increased municipal expenses do not bode well for the 2010 budget process.

Feb., 16 South Dundas council members were given an overview of the 2010 budget by South Dundas chief administrative officer Stephen McDonald.

Assessment growth in South Dundas last year will mean $19,637 in new revenue for the municipality. But, that growth only makes up for half of a major loss of tax revenue due to the reclassification of the township’s only large industrial property, Marimac. South Dundas’ Ontario Municipal Partnership funding is decreasing by $173,00 while expenses attached to wages, benefits, contracts and restructuring are increasing.

The budget process starts in the hands of staff, who in the first round outline their budgetary wishes for the year in each department.

If all those wishes were granted in 2010, taxpayers would see an increase of 27 in their municipal levy. However, the full list of wishes is seldom granted.

McDonald and treasurer Shannon Geraghty provided council with a list of recommended budget cuts that could reduce the municipal tax increase to eight percent.

At last week’s meeting it was obvious that an eight percent municipal increase was still too much for South Dundas council to accept.

At the first budget meeting municipal managers will start the process of presenting their budgets and answering questions about departmental priorities. The first in the series of budget meetings will take place on March 10.

From those discussions South Dundas council will aid in the process of cutting discretionary spending that they deem unnecessary.

Every $45,425 cut from the 2010 budget represents a municipal tax rate decrease of one percent. Therefore, to keep the municipal portion of taxes from increasing South Dundas would have to cut more than $360,000 from the budget, even if they agree with all of the initial cuts suggested by the CAO and treasurer.

CAO McDonald reported that the last South Dundas municipal tax increase of two percent took place in 2006. “It’s starting to catch up with us,” he said, adding that, “We are starting to hit a wall where people will start seeing a reduction in service.”

“We need to be careful. We are still in the middle of recession,” said South Dundas councillor Del Jones. “We do need to be cautious,” said South Dundas deputy mayor Steven Byvelds.

Property taxes are made up of municipal, counties and education levies.

South Dundas controls only the municipal portion of the tax bill, even though they collect the money for the other levels of government.