Central and North Frontenac Take Different Routes to 5% Levy Increases

North and Central Frontenac Councils both met last Thursday (December 4) for a new kind of budget process.

They were presented with a complete draft budget by their treasurer, which had been put together by staff as in previous years, but unlike in previous years, staff had been in direct contact with the mayor throughout the process. The budget before them was presented in the name of the mayor, and it was up to Council to adopt the mayor's budget as it was presented, or to make amendments as they saw fit, and adopt an amended budget.

Once the budget was adopted, the mayor had five days to exercise a veto of one or more items in the adopted budget. If the mayor did that, Council would have five days after that to over-ride that veto should they so wish, but a 2/3 majority on council would need to vote against the mayor's veto, in order for it to be overturned. As a member of council, the mayor has a vote, in that vote, to overturn their veto.

Mayor Lichty in North Frontenac said, in advance of the budget presentation, that he will not exercise a veto, no matter what Council decided at their meeting, and Mayor Frances Smith of Central Frontenac told Council, at the end of their budget meeting, that she was not going to veto anything in the budget.

Both Councils settled on an increase, in the 2025 amount to be raised through taxation (total levy to ratepayers), of about 5%.

Both townships have about 1% from new construction coming on to the tax rolls, lessening the impact of that levy increase on existing ratepayers to a 4% tax rate increase (1.2% in Central Frontenac and .89% in North Frontenac).

But they each came to that final number in a different way, reflecting the differing financial positions they each face.

North Frontenac Budget

North Frontenac Council settled on an increase of 4.8% to the overall levy to ratepayers in 2026, but with just under 1% increase in tax assessment due to growth, the impact on the tax rate for North Frontenac residents is $3.8%.

Most of the major items in the budget were not really up for debate at the meeting, as equipment purchases and much of the road work follows multi-year plans, and administrative costs do not have a lot of give either. Salaries follow an established grid, and cost of living increases are set at the October annualized federal inflation rate, 1.7% this year.

But Council did look at a number of new and adjusted expenditures, which had the potential of adding to, or lowering, the tax increase in the budget that was presented to them. That budget was released to Council and the public on November 20, and adjusted slightly by staff for December 4th. The proposed levy increase was 4%.

The budget called for a summer student to be hired to work on Economic Development, at a cost of $20,000. The position was in place this past summer, funded out of reserves, but for 2026 it is to be funded by taxation. Councillors Wayne Good and Vernon Hermer both spoke against funding the position.

Councillors Hermer and Good both said they do not feel the position is necessary, and Mayor Lichty put the matter to a vote. Councillor Regent was not in attendance at the meeting, leaving 6 to vote on pulling the position from the budget. It was a tied vote, and the motion to remove the position was defeated, leaving the money in the budget.

Council did decide to trim a proposed increase in hours for the Deputy Fire Chief, saving $10,000, as well as trimming a $5,000 increase to the Community Improvement Plan to $2,500, and a couple of other small items, leaving the levy increase at 3.78%.

Then Council debated the amount of money that was allocated in the budget to the asset management program. Public Works Manager Darwyn Sproule had indicated that, in terms of the major capital expense that the township faces, keeping its hard topped roads to an acceptable standard, they have been falling behind, year after year. To address that, Council has decided to increase the capital budget by 2% each year to create an extra pool of money for major capital projects. That 2% was already included, accounting for over half of the budget increase.

Still, because of the cost of road construction, the township is still falling further behind. Noting this, Mayor Lichty said that Council should “have a conversation” about that 2% level.

When that took place, Council was receptive to increasing that 2% to as much as 4%, but after debate settled on an extra 1%, and the budget was adjusted up 1%, to a 4.8% levy increase.

When assessment growth is factored in, the impact to existing ratepayers is a 3.84% increase. The Treasurer, Kelly Watkins, estimates that North Frontenac will have about $8.6 million in reserve funds at the end of 2025, but that figure will not be determined until later in the spring of 2026.

Central Frontenac Budget

The mayor's budget that was presented to Council on December 4, called for a 5.5% increase in the levy to ratepayers.

The budget was released to Council in advance of the meeting, and a series of proposed changes were presented to Council, each as a motion to be voted on. The meeting consisted of a short presentation of the budget, followed by the consideration of those motions.

The net impact of all the proposed motions would have been an 8.5% levy increase. A number of the proposals to cut money, to make room for the increases, did not pan out once they were explained in detail to Council.

Treasurer Michael McGovern went into the budget hoping to cap the amount of money being taken from reserves, which had been a feature of budgets in recent years, and also not borrowing any more money for large projects. The township is at about 25% of its borrowing limit according to provincial recommendations, and McGovern did not want to go any higher. He also wanted to maintain accumulated reserve funds at $4million, as a minimum.

To do all this, the amount of capital spending in the budget had already been cut by the Public Works Manager, by deferring some projects.

With a lot of back and forth debating, Council came to a budget with an increase of 6% to the levy. By making cuts elsewhere, council was able to add money for upgrades to Mountain Grove and Olden Road, in the vicinity of where the two roads meet at the foot of the hamlet, a $700,000 project, and make improvements to both Eagle Lake Road and Wilkinson Road. A proposal by Councillor Gowdy to increase the gravel budget by $250,000 to be used to improve a number of gravel roads in the township, was not adopted.

With the budget sitting at a 6% increase, McGovern was asked if a transfer of $110,000 from reserve funds (representing 1% of the $11million total levy) could be made, while still maintaining the minimum reserve position of $4million that he had targeted.

He said that he needed to know what was left in the year end surplus, which would not happen until February, but that he thought it would be okay.

“The reserves may drop below the $4million mark for a time, and I can let Council know if that happens, but I think we will be in a better position with this budget than we were last year, so I'm happy with it,” he said.

Council decided to use reserve funds to bring the levy to a 4.9% increase. With 1.2% in growth, the impact of the budget on existing ratepayers is about a 3.7% tax increase.

Citing a cumulative tax increase over the last 4 years of over 15%, Councillor duncan McGregor voted against th e budget. The rest of Council supported it.

Overall Impact in Central and North Frontenac on final tax bills

The township budgets are combined with the Frontenac County budget, which is up 4.86% this year, and a provincial levy for education. The education levy has remained the same, a 0% increase, for at least a decade. Assuming that remains the case, the total tax bill for most Central and North Frontenac ratepayers will go up by about 3.5% in 2026.