Niagara-on-the-Lake residents will see a potential 2.1 per cent hike on the municipal portion of their tax bills in 2021 — an increase of about $30 based on a $563,000 home assessment.
The town was expected to approve its operating budget for 2021 at $13,126,772 on Wednesday evening — a spending hike of $440,621 from 2020.
The increase to the town portion of the average tax bill is significantly smaller than 2020's hike of 8.7 per cent.
The Town of NOTL also expects to see a small operating surplus, despite absorbing some major revenue losses due to the COVID-19 pandemic.
Coun. Allan Bisback, who chairs the town's finance and audit committee, said that total surplus is not known yet.
He said the committee “pushed back dramatically on some costs” for 2021 and encouraged staff to find some savings in 2020 as well.
“It's what I would call a maintenance year. There's no frills,” Bisback said. “Things weren't reduced. We just didn't add.”
When budget talks began last October, he said committee members knew full well they were working “within a different environment” because of the COVID-19 pandemic.
However, not knowing what the full impact of COVID-19 would be, they planned the budget normally and then took a closer look after. It was an iterative process. He said it originally was presented as a 7.68 per cent increase ($978,824).
“And then we started looking at the detail,” Bisback said, adding it looked at that time like the town was headed into a year-end deficit.
Instead, they managed to reduce the increase by more than half and a small surplus is being forecast thanks to staff efforts.
He said the committee decided it would be “a maintenance year” to keep try to keep spending down.
Committee members decided to “focus on protecting all the services for the town, not cutting, but protecting all the core services. And so we actually pushed back to departments that were asking for some increases and we essentially kept most departments at the 2020 level,” Bisback said.
“So, like parks and rec, we rolled them back to essentially no growth year over year, and we said if there's going to be any material increase in the operating budget, it had to be things that were that we're contractually bound to, we have obligations for and what I would call must-dos.”
He said town staff kept most of their spending low and managed to keep the town operating on a “settling foundation.”
The operating costs of COVID-19 were covered by federal relief funding of $526,000, which the town received in the fall of 2020.
“The current projection is to come up with a small surplus, which I think is amazing, considering the circumstances,” Bisback said.
Some of the increased costs the town was obligated to pay were staff salary hikes of around 2 per cent.
He said the town's insurance cost also “went up dramatically,” increasing $79,000.
The committee also recommended taking a percentage of any surplus from its supporting organizations, like the library.
“The library this year did a really good job managing appropriately. They watched their spending very, very closely and did a very good job and they're forecasting a surplus, a material surplus for 2020. So there was a motion that came to the floor at the audit and finance committee to have some of that surplus come back to the taxpayers,” he said.
“The idea was the taxpayers fund the library annually based on their requests. They spent less in 2020, so can we give that back to the taxpayer.”
While the operating budget normally would be passed in December, he said it took longer this year having to really look hard at the capital budget.
He said town staff wanted to examine whether it was possible to complete planned 2021 projects on top of finishing the projects that were put on hold in 2020.
The town's operating budget will move forward at around the $10 million range, similar to 2020.
“We haven't cut capital. We've deferred some projects further down the line,” Bisback said.
He said the three major projects the town has to go into debt for in 2021 are the Mississagua Street culvert work being done now and two expenditures for NOTL Fire Services — a new pumper and personal self-contained breathing aparatus for firefighters.
The breathing apparatus are a necessary safety and COVID expenditure, he said.
“Here we had our firemen sharing breathing apparatus. Probably not good in light of COVID. And so we made a determination we need to fund those this year.”
The committee also did not accept any non-profit organization funding requests this year. Typically the town grants about $100,000 to various organizations like Music Niagara, Friends of Fort George and various festivals.
“We just said we can't entertain any of those events at this juncture,” Bisback said, adding the committee recommended setting aside about $30,000 for consideration if things change.
He said the town also took money back for events that didn't take place in 2020, like $42,000 for the Icewine Festival, and put it toward the 2021 levy.
“So, we gave it back to the taxpayer,” he said.
Some organizations will be unhappy, but he said they were “hard decisions” that were necessary to make.
He said there are two “big risks” with the uncertainty of 2021 — parking revenues and town fees revenue.
Parking revenue for 2020 was down year over year by $800,000, he said, according to the last report.
Most recreational user fees were also not increased. However, the town did increase development charges and “regular indexing.”
The storm water levy is $456,998, an increase of 4.5 per cent. The region's tax levy has not been reported yet.
But Bisback said the town has no control over those levies.
“All we can focus on is the town portion.”
The town secured a $10 million line of credit with the Royal Bank of Canada in 2020 for emergency purposes, but has not had to use it, Bisback said.
Town treasurer Kyle Freeborn said the “biggest impacts on the budget have been lost revenues, in particular parks and recreation programming and parking. These impacts have been reflected in the 2021 budget by reducing revenues in parks and recreation and reconsidering how and where parking revenues are used.”
The town also received $36,009 to address “transit-related COVID pressures,” Freeborn said.
In 2021, the town received a further $105,000 from the province through the Safe Restart Agreement.