Robert Fisher
Staff Reporter
KILLALOE – Budget discussions took on a contentious tone over two nights in Killaloe last month. The Finance Committee for the Township of Killaloe, Hagarty and Richards (KHR); essentially a committee of the whole, began 2025 budget deliberations with meetings Feb. 19 and Feb. 24. The Gazette asked Chief Administrative Officer Tammy Gorgerat for any supporting documentation and numbers she could provide on two occasions and received no reply. Mayor David Mayville did provide the Gazette with some of his own files and calculations. The committee did not discuss a forecasted tax levy change for 2025 during either meeting.
During the Feb. 24 meeting, the committee discussed a potential miscalculation in the Special Area Rate (SAR) for the former Village of Killaloe amounting to a more than $200,000 overcharge to the rest of the township (i.e., residents in the SAR area were undercharged and those outside the SAR area were overcharged).
Mayor Mayville’s summary of Gorgerat’s report to the committee showed an increase in tax arrears during 2024 of $162,000 and an increase in water and wastewater arrears of $31,000. She showed a withdrawal from reserves in 2024 of $990,000 and was showing, initially, an additional $529,000 reduction in reserves to balance the operating budget for 2025. Variance analysis showed actual expenses for everything non-roads related coming in $516,000 under forecast and the roads department coming in $163,000 under forecast. Variance analysis on revenues showed a small surplus of approximately $31,000, not including reserves.
During her opening remarks, Gorgerat said the township asset management plan indicates that a 4.7 per cent average annual levy increase over 15 years is needed to eliminate the infrastructure deficit. The increase would be put into capital reserves. Gorgerat quickly reviewed financial risk indicators for the township. The township is high risk in uncollected taxes and moderate risk in terms of annual surplus/deficit. Significant portions of Gorgerat’s presentation were largely inaudible due to competing sounds of councillors shuffling papers and turning pages in their budget binders.
Gorgerat suggested the committee consider setting up a reserve for future OPP policing cost increases. The government picked up some of the cost of the large 2025 OPP cost increase which resulted from a new, backdated contract. She suggested budgeting the original amount approximately $580,000 and create a reserve of $84,000 by the end of 2025.
Mayville’s analysis showed a variance on wages of nearly $300,000; actuals lower than forecast, representing, by his calculations, roughly 10 per cent on the tax levy (KHR had a 17 per cent levy increase for 2024). The mayor also provided an analysis of water and wastewater costs; water and wastewater are supposed to be paid only by those in the SAR area but have historically been included in the overall budget and paid by the entire tax base. He suggests that removing water and wastewater from the main budget would have reduced the forecasted deficit by more than $325,000, representing 11 per cent on the general tax levy. Those in the SAR area would see their rates increase to compensate. Gorgerat noted, in her remarks, that the SAR is supposed to include water and wastewater costs. Council, last year, decided to change the water and wastewater collection policy to add arrears greater than 12 months to the property tax bill. Gorgerat informed council that the increase in tax arrears will negatively impact the township financial ratios.
Discussion
Coun. Ted Browne suggested the SAR needs to be examined because, according to Gorgerat’s numbers, it generated a surplus of $63,000 for 2024 and a garbage truck that is used throughout the township is being paid for only by those in the SAR area. Gorgerat explained the surplus resulted from delays in project spending.
The members discussed the status of a former firehall that is being used now as a warehouse. Browne claimed the township told taxpayers the building wasn’t safe as justification for a new firehall. Mayville suggested staff analyze the operating costs of the building compared to the cost to demolish it. Asset Manager Dale Thompson said the discussion, in the past, wasn’t about whether the building was safe, rather about cost to do necessary upgrades. “It wasn’t necessarily,” about safety, Thompson said.
Coun. Brian Pecoskie recommended staff analyze current user fees with a view to increasing to more appropriate levels.
Mayville opened the Feb. 24 meeting saying that he felt there were areas where forecasts were high, leading to a higher tax levy increase than necessary. “I would urge council to be aware that over-budgeting expenses,” as a safeguard costs the taxpayers. “Our 2025 budget must be tight.”
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