Wednesday, December 16, 2015

Clarenville's Budget 2016

Clarenville's Budget 2016

In her first budget as Chair of Finance, Deputy Mayor Ashling Avery presented Council’s 2016 planned revenues and planned spending for the Town of Clarenville for the 2016 year ahead. 

The preparation of the 2016 budget was challenging.   Council has committed to significant renewal – new skilled staff as many long-time town employees retire, upgraded infrastructure to meet the needs of a modern growing town, and stronger commitment to community development to foster livability, growth and sustainability. At the same time, these commitments are met with significant challenges. The 2016 budget is a well-considered balance between the Town’s needs and the ability of taxpayers to pay. 


THE BUDGET

The budget was presented in light of the fact that growth has slowed and natural revenue growth has not been able to keep up with the demands of operating the town.  The balanced budget laid out plans for the projected collection and expenditure of $10,675,716 in 2016.  

Planned Investments in 2016

·                     A commitment to a further $600,000 in municipal contribution for road improvements – this will add to the approximately $1.7m of municipal dollars spent on road upgrades over the past 2 years.     
·                     A 5% increase in budgeted spending for fire protection.  This includes some new equipment, higher honorariums and higher on-call rates for the volunteers that make up the Clarenville volunteer fire department
·                     A commitment to establishing Municipal Ticketing authority for the Town’s Enforcement officer. 
·                     A 7% increase in commitment to Transportation Services to meet the needs of snow and ice control.
·                     A 23% increase in spending on Environmental Services – solid waste management, Water plant coverage and waste water management
·                     A 34% increase in Planning.  This includes upgraded town signage, town entrance improvements, Canada150 planning, and the introduction of community telephone communications system – Synrevoice.
·                      A 7% increase in parks and recreation for ongoing rehabilitation and maintenance of community playgrounds & public areas.
·                     A commitment to partner with the Clarenville Shopping Centre Association to renovate and resurface the town owed Shopping Centre lot in 2016.
·                     Animal control - $6000 to SPCA for their work in animal control in Clarenville

Clarenville’s 2016 Planned Revenues and Spending

Source: Town of Clarenville Budgets 2016, 2015, 2014, 2013


Key Challenges

Three specific challenges had to be addressed in the 2016 budget: slowed growth, higher assessed property values, and a new provincially instituted solid waste management program coupled with necessary preparations for upcoming Federal regulations regarding waste water.   

Slowed Growth

The largest contributor to Clarenville’s budget revenue is property taxation at the residential level and that the commercial level.  The growth that we have witnessed over the past decade has contributed significantly to the natural growth in taxation revenue for the Town of Clarenville.    The past two years have seen this growth slow significantly - as have the corresponding growth in tax revenue. This has had and will continue to have a significant impact on the Town’s finances.




The Assessment Challenge

Clarenville, and towns like it, get the vast majority of operating revenues from property taxation. Your municipal tax bill is largely a function of how much your property is deemed to be worth.   Because this was a property reassessment year for the Municipal Assessment Agency (a Provincial body whose purpose it is to valuate private properties in municipalities every three years), and because the economy has been in a period of growth for the three years hence, the assessed values of properties in Clarenville have risen, and in the case of residential properties has risen quite a bit since the last assessment.   

In 2015, Clarenville charged property tax at a rate of $675 per $100,000 worth of residential property (6.75 mils) – without a reduction in the mil rate to compensate for the higher assessed property values, taxpayers would have seen a significant jump their municipal tax burden.  Council would not allow this to happen, and put a tremendous amount of time, effort and consultation into determining what mil rate would be sufficient to strike the balance between managing the tax burden and covering the needs of the Town - without sacrificing services.  After considerable analysis, the Town’s mil rate has been reduced from 6.75 to 5.9 – considerably lessening the impact of the assessment increase on most taxpayers.


The Waste Management Challenge

Most everyone will agree that reducing our environmental footprint is necessary if we are going to sustain ourselves in the future.   The initiatives that work towards this however come at a cost that is largely borne by the citizenry.  In the case of solid waste, the provincial government has been working to reduce the number of dumps across the province and has consolidated waste disposal on the east coast to Robin Hood Bay in St. John’s.  This means that garbage will now have to be shipped further and that comes at a cost.  Clarenville will become part of this process in 2016, and although the implementation should be relatively seamless to the homeowner, the Town will bear a significantly higher cost for waste management - $180 per household.   There are benefits to be sure – the implementation of curbside recycling and four bulk collections per year, along with the knowledge that our environment will be better off.

In 2020 new Federal regulations will affect how we handle waste water (sewage) disposal.   This will end the dumping of untreated sewage.   To determine what we as a community need to do to prepare for this the Town has to do a considerable amount of testing on our current outflows, and this cost is borne by the Town.  As we move towards 2020 we’ll have a better idea of what we’ll need to do to comply with the new regulations, but assuredly that compliance will cost.    

The combined effect of these challenges ensured that careful and well thought out decisions had to be made for 2016.  Let the new year begin...