7% Baseline Increase Dampens Central Frontenac Brainstorming Session

Jeff Green | Nov 06, 2024

Mayor Frances Smith spelled it out at the start of a special meeting of Central Frontenac Council to hear from both staff and council about budget priorities before Treasurer Michael McGovern prepares and presents the 2025 township budget.

“It is not going to be an easy year,” she said.

Each member of council was given the opportunity to bring forward their “wish list” and, being a group that has already been through a couple of tough budget years, there was very little 'blue sky thinking' in what they said.

Two major arterial roads, Road 509 and the Long Lake Road, were both mentioned by several councillors as needing to be addressed, as well as Crow Lake Road in the village of Crow Lake section.

The flooding issue at the Olden Community Hall, which may require some extensive work to mitigate, was top of mind for District 2 Councillor Dan Meeks.

There was also talk about potential new hiring in the building and facilities department, to deal with backlogs and kick start the septic inspection program.

But then Treasurer Michael Mcgovern entered with a dose of uncomfortable reality.

“We are looking at, I would say, a 7-15% increase just to maintain what we are doing now, without any new capital or hiring,” he said.

He then focused in on the 7% projection.

“We are looking at a 2.5% increase from the OPP, that we can't do anything about, but I might be able to bring that number down a bit because part of it is from reconciling for 2023 by doing an accrual in 2024, but it is at least 1.5%,” he said.

He then added 1% because of a drop in provincial funding transfers, 2% for a cost of living adjustment (COLA) increase in staff wages based on the annual inflation rate, a drop in bank interest due to lower interest rates costing .0.5%, and 2% for a commitment the township has made to invest in their asset management program as a buffer against foreseeable infrastructure costs to buildings, bridges, and roads.

“That gets us to 7% right there,” he said, “before we look at any capital projects.

“We don't have to do the 2% for asset management. That would put us further behind and lead to problems down the road, but it would get us to 5%. And we don't have to do COLA, but staff retention becomes an issue there, as we know the cost of living has gone up for everyone. But these are decisions council can make.”

Council was conservative in their asks before McGovern's intervention, and more conservative after.

Councillor Duncan McGregor summed it up: “in my mind, a healthy budget is about 3%, and here we are looking at 7% already, 5% if we drop asset management for a year.”

“New things are always coming to us that we are not counting on,” said Mayor Smith, but we are left to deal with them. It is hard because we all pay these taxes, all of our staff and council, everyone in this room. And we have seniors living in fixed incomes who can't afford any tax increase at all, they can't afford the cost of food. But we do the best we can. So what do we do now.

“It would help me to get some direction from council before I construct the budget,” said McGovern.

“I don't think, from what I hear around the table, that we are ready to give you a number, a target. We need to see what staff tells us that they need, not the wants, the needs, and we can go from there.”

After debating whether to complete the budget earlier this year than in previous years, which would mean that the budget would be completed before the final accounting for 2024 was completed, council did not come to a firm decision.

They agreed to hold a budget meeting on December 17 to look at a draft budget, at which time they will consider whether to go ahead and complete the budget in early January, or wait until the revenues and expenses from 2024 are completed, in which case the budget process will stretch into early March.

Councillor Niki Gowdy, among others, is pushing for an early completion in order to go to tender with projects before the construction season begins, hoping for better pricing and earlier completion of projects.

Mayor Smith said there is nothing stopping council from going to tender on projects before the budget is complete.

“We just need to approve it at council, understanding the spending then has to go into the budget. It is perfectly legal and normal to do it that way.”

But given the scenario Michael McGovern was pointing to, there may not be a lot of capital projects in Central Frontenac in 2025, whether the budget is completed eariler or later.