Huntsville’s 2013 budget bumped back to committee
Councillors to continue discussions in February
HUNTSVILLE – The majority of Huntsville’s councillors are saying a 9.5 per cent increase to the municipality’s budget will just not do.
“I’m not sure where the rush is to pass this today or anytime soon. I think there is still time on the clock in order for us to do our due diligence and ask the questions.”
– Coun. Tim Withey
Couns. Tim Withey and Karin Terziano put forward a motion at a Huntsville council meeting on Jan. 28 to send the draft 2013 budget back to the corporate services committee for further review, despite the budget being on the docket for approval that day.
“I’m not sure where the rush is to pass this today or anytime soon. I think there is still time on the clock in order for us to do our due diligence and ask the questions,” said Withey. “If, at committee when we were looking at what the number was and it was somewhere in the league of four or five per cent, we probably wouldn’t be having this debate today. It’s that 9.5 that is driving further due diligence into this process.”
Councillors seemed to take a sharp inhale of breath during the corporate services committee meeting two weeks ago when they heard Huntsville’s budget was projected to increase by about 9.58 per cent unless cuts were found.
Some have since combed through the budget and started asking questions, which they would like to have answered.
Withey said he wholeheartedly acknowledged that qualified staff members have poured considerable amounts of time and energy into the draft budget.
“But I don’t think we’re doing anybody any favours, certainly not the taxpayer, by just raising our hands and approving this today,” said Withey.
He recommended councillors wait until the 2012 year-end budget numbers and public infrastructure department review were in their hands before finalizing the 2013 budget.
Coun. Karin Terziano noted that councillors had about four days to review the budget document before the corporate services committee meeting, which was not enough time.
“I just think this has come about too quickly and, as a councillor elected to help take care of the dollars, I think we need to go back and look at it a little further,” said Terziano.
Coun. Chris Zanetti, chair of the corporate services committee, seemed to have little faith that sending the budget back to committee would have any significant impact.
“The 2013 budget that we looked at in committee didn’t just come about. It was a long process,” said Zanetti.
He noted that the executive management team, consisting of highly qualified senior staff members, had gone through the budget line-by-line before presenting the draft budget. He said he believed the executive team did what it could to keep the budget as low as possible.
And Zanetti reminded councillors that staff had also presented a list of 24 service reduction options that could have lowered the budget, but councillors approved only one of them. The chosen item was an increase in planning fees, which may result in an additional $25,000 in revenue.
Zanetti suggested that councillors approve the budget.
He said waiting for the 2012 year-end numbers and the public infrastructure review is a delay tactic.
He commented that a significant change to the draft budget was unlikely due to both staff having already made major reductions to the budget over the last three years – including reducing materials and contracted services by $250,000 – and council having made serious decisions in the past that have affected the budget.
There are four major items affecting the 2013 budget, which have pushed the budget up by 9.5 per cent, said Zanetti.
The first is a council decision to increase capital spending by $150,000 in the wake of mandatory provincial capital asset planning changes.
The second was a council decision to take $173,000 in benefit reserve funds, transferred to the municipality after it opted out of the district’s employee benefits program, and put it into operational revenue in 2012.
“We took that $173,000 and put it into operations to reduce the levy. Was that right? It was right for last year,” said Zanetti. “But we don’t have that money for this year.”
The third item was the result of major restructuring in town hall last year, which cost the town about $700,000 in severances and related costs. Council chose to borrow the money to finance those costs from reserves and now it has to pay it back, said Zanetti.
The fourth item is a combination of budget realities from 2012 that caused a 2.2 per cent increase in this year’s budget. Those include lower than expected arena and community services revenues, increased insurance premiums and a loss of parking metre revenue, among others.
“Those things all add up. The bottom line is that our increase is about 9.5 per cent, made up of those four major items,” said Zanetti. “Yes, we can go look at the budget line-by-line. You might save another one per cent. But if you think you’re going to find $100,000, you’re going to have to cut some services drastically.”
He said council had an opportunity to “right the ship” with the 2013 budget. Despite Huntsville’s budget increasing by 9.5 per cent, the impact on the average taxpayer’s bill drops to about 1.64 per cent when reductions in district and education taxes are factored in. The result is an additional $46 in taxes for a property assessed at $350,000.
Huntsville’s budget accounts for about 30 per cent of a taxpayer’s bill. The district accounts for about 40 per cent and provincial education taxes make up the remaining 30 per cent.
But councillors are now skeptical the district will pass the zero-per cent budget increase it had projected and are concerned about how that will affect the overall impact to the Huntsville taxpayer, especially if combined with a 9.5 per cent increase to the town’s budget.
Council agreed to defer a decision on the 2013 budget pending further review at the February corporate services meeting.