Budget Speech 2022
Presented by Councillor Rhoda Hannem, Chair of Finance and Human Resources
Your Worship, it is my pleasure, on behalf on the Finance Committee to present Budget 2022, a budget that maintains the Town’s progress and important investments in equipment, infrastructure, programs, and services. Section 78 of the Municipalities Act requires that proposed expenditures shall not exceed anticipated revenues and this proposed Budget complies with this requirement.
It is anticipated that the total operating funds required to operate our Town in 2022 will total $6,074,851.00 which is an increase of $391,888 over last year. Wages and benefits are expected to account for 27% of the total budget, supplies and services 40%, debt charges 13%, gas tax projects 6%, Council related expenses 2%, capital out of revenue, which are those capital items that Council does not borrow to purchase, account for 12% of the overall operating expenses.
The major source of operating revenue comes from property taxes. Residential property taxes, including property taxes and water and sewer taxes, account for 41.8% of revenue and commercial property taxes, business taxes and water and sewer taxes account for 22.9% of revenue. Assessments by the Municipal Assessment Agency are used to calculate taxes for the following year and the values are based on the property values of 2021. The assessed values of many properties have decreased in 2021 leaving overall revenue from taxation expected to be $75,000 less than in Budget 2021, therefore, the Committee had less revenue to work with at the beginning of the planning process.
The Committee analyzes every line item using historical data and projections when preparing the budget. It also evaluates discretionary spending and departmental proposals. We do what we can to diminish general operational increases, but we cannot do so at the risk of compromising the Town’s commitment to maintain core services and to continue important investments in equipment, infrastructure, programs, and services. Not unlike regular households, the Town is seeing an increase in everyday expenditures and despite our best efforts, the Committee was unable to balance the budget without increasing taxes, there will be a mil rate increase of 0.5 mils, from 8.5 mils to 9.0 mils for residential and commercial property taxes for 2022 (this will increase revenue from property taxes just $135,464. Capital items that were budgeted for in 2021 but were not acquired in 2021 created a surplus of $675,500.00 that will also be used in 2022 to balance the budget.
The 2022 Estimated Budget is presented as follows:
Sale of Goods and Services 408,650
Other Revenue from Own Sources 263,600
Federal and Provincial Grants and Subsidies 798,369
Reserve Surplus from Prior Year 675,500
Total Revenue $6,074,851
General Government $1,485,764
Protective Services 171,900
Transportation Services 661,879
Environmental Health 565,075
Planning and Development 184,520
Recreation and Cultural Services 1,023,835
Fiscal Services 1,981,878
Total Expenditures $6,074,851
Included in the operating budget is capital out of revenue expenditures of $750,645 which are capital items that Council prefers to pay for out of revenue, rather than borrow to purchase, to reduce its debt charge ratio. Some of the purchases that are included in this account is the purchase of a mini excavator, and two pick up trucks (budgeted for in 2021 but not purchased), this is part of a replacement schedule to replace aging equipment, a line painter and tag trailer for the mini excavator. The condition of the multi-use courts has not gone unnoticed, repaving of these courts are also included in this account. The Town will be contributing to the 02 Club to make upgrades to its trail so it can be utilized in all seasons. Other amounts include those previously budgeted for, but allocated money not being paid out until 2022, such as the provision to acquire lands through expropriation, purchase and installation of 4 Crosswalk signals, repair to the Town Hall’s roof and siding, and broadcasting system.
RATES AND FEES
During the Budget process, Council reviewed the schedules of rates and fees.
The Town of Lewisporte offers a 15% discount to seniors receiving the Guaranteed Income Supplement (Box 21 on the T4A OAS), this will not change, however the Finance Committee proposes that any adjustment for prior years missed by a resident will only be for the prior two years. There will be no rate increases to any of our recreation facilities or Woolfrey’s Pond Park and Campground, rates for our water and sewer tax remain unchanged, as well as fees for permits and our services.
Each year Council makes substantial investments in buildings, upgrading and replacing roads, and upgrading water and sewer. In 2022 the Town is budgeting an investment of $2,410,484 for upgrades to water and sewer infrastructure (through the continuation with phase II of the outfall consolidation located uptown, and the outfall consolidation at King Street), $1,214,767 to upgrade roads infrastructure (by continuing the recapping of our streets as the project funding will allow; and the upgrade of the water and sewer, curb and gutter, and new asphalt for Beaumont Street), and $2,425,961 for replacement of the water tank.
The Town has secured funding, or has submitted application, for these projects and the Town’s share of funding is expected to be approximately $1,154,457 with the remainder being obtained through cost shared arrangements with the Provincial and Federal Governments.
There is also provision for projects that are not eligible under the Municipal cost shared programs and Council will seek funding from other sources or will fund these projects if funding is not available.
Provision is made in the capital budget for the continuance of the new softball field, continue with the upgrades to Woolfrey’s Pond Park and Campground with the addition of a new comfort station, and begin the first phase of development of a new splash pad.
At this time, I would like to take this opportunity to thank you, Council, and staff for the time and effort that was required to prepare and present this budget. Finance is committed to updating Council and our Residents of the Town’s finances. There will be a report to Council on the operations of the Town to December 31, once all records are available.
The Committee recommends, and I move, approval of the 2022 Schedule of Rates and Fees established within this budget, as attached.
The Committee recommends, and I move, that May 31, 2022, be established as the due date for payment of taxes.
The Committee recommends, and I move, that a 3% discount will be applied to tax payments received on or before March 31, 2022.
The Committee recommends, and I move, that a 15% discount will be applied to seniors receiving the Guaranteed Income Supplement (showing in Box 21 on the T4A OAS) providing it is paid in full by the due date of May 31, 2022, any adjustment for prior years missed by a senior will only be for the prior two years.
The Committee recommends, and I move that all taxes in arrears after May 31, 2022, will be charged a compound interest rate of 15% per annum and will be charged at the first day of each month on the outstanding principal. All other invoices, including those issued because of supplementary property assessments, are due 30 days from the date of issue and all invoices in arrears at the end of the month following issuance will be subject to compound interest charges of 15% per annum.
Payment of taxes is permitted by credit card, without a fee, from the date of invoice up to and including March 31, 2022, this applies only to current year taxes, after that date a fee of 1.5% will be added to the payment.
2022 TAX EXEMPTIONS
The Committee recommends and I move, that pursuant to Section 111 of the Municipalities Act M-24, the properties owned by the Kinsmen Club of Notre Dame located at 47 Centennial Drive and Loyal Orange Lodge located at 230-232 Main Street be exempt from property tax for 2022.
The Committee recommends, and I move, that pursuant to Section 111 of the Municipalities Act M-24, the property owned by the Lions Club located at 18 Bowater Avenue be exempt from property tax for 2022.
The Committee recommends, and I move, that pursuant to Section 111 of the Municipalities Act M-24, the property owned by the Calypso Foundation located at 45 Centennial Drive be exempt from property tax and business tax for 2022.
The Committee recommends, and I move, that pursuant to Section 111 of the Municipalities Act M-24, the Interfaith Goodwill Centre be exempt from the payment of 2022 business tax and water tax.
The Committee recommends, and I move, that pursuant to Section 111 of the Municipalities Act M-24, the property owned by the Masonic Lodge located at 12 Tizzard Street be exempt from property tax for 2022.
ADOPTION OF BUDGET
The Committee recommends, and I move, adoption of the 2022 Operating & Capital Budgets, as presented.