Municipal Budgeting For 2025 – Five Is The New Zero

Jeff Green | Nov 13, 2024

When Central Frontenac Council met last week to talk about their 2025 budget direction, Treasurer Michael McGovern was a bit of a wet rag, dampening enthusiasm for new spending by outlining how taxation was already heading to an increase of over 5% because of costs that our out of council’s control.

Other township will face similar headwinds when they sit down to look at their 2025 spending/

South Frontenac Council was supposed to be looking at their capital busget this week, but that has been put off to December for administrative reasons, but the budget is still slated to be completed by the end of December.

Chief Administrative Officer Louise Fragnito said that the increase in OPP costs were an unwelcome surprise that cannot but have an impact on the municipal tax bill.

Labour costs are by far the largest part of OPP costs, and the OPP signed a labour agreement with its employees in late March that included a significant wage increase. This, combined with an increase in calls for service, led the OPP to indicate that municipalities who use their services would be seeing an increase for 2025.

These include most of the small municipalities in Ontario, whose lower population density compared to urban municipalities would make it overly expensive to fund their own police force.

“But until we received notice about the costs for 2025 a few weeks ago, we did not anticipate such a large increase,” Louise Fragnito said.

The base increase was large, and on top of that were extra increases due to a catch up between budgeted costs and actual costs. Treasury departments in the three Frontenac municipalities have decided to fund the extra increases out of their 2024 budgets, using surpluses or reserves, to keep the impact on 2025 taxes as low as possible.

However, the net cost increase that will be applied to the 2025 South Frontenac budget is $426,6133, a year over year increase of 15% in the amount the township will pay for policing.

The impact of this on the 2025 South Frontenac budget is just under a 2% increase in the levy to ratepayers. Combined with an estimated 2% increase due to inflation, and a 1% increase to cover replacements costs for township infrastructure, council will be faced with a minimum 5% tax increase to provide the same level of service that they are providing to residents currently.

South Frontenac is also facing a $40,000 net decrease in support from two provincial funding programs for rural municipalities.

As reported last week, Central Frontenac is facing similar impacts. The net OPP billing is up by 14%., a 1.5% hit on taxpayers.

In North Frontenac, net OPP cost are up by about 14%, which will translate to a tax increase in the 1.5% range. (Note, these numbers have changed since staff reported to council in October)

In Addington Highlands, the net billing increase from the OPP is over 19%, $151,690 in dollar terms. On its own, the increase could bump of the 2025 township by over 3%.

The OPP increases reported in Frontenac County and Addington Highlands are lower than those in other Eastern Ontario municipalities.

In Napanee, the increase is over 23%, and could increase taxation by over 6%, according to township officials.

For his part, North Frontenac Mayor Gerry Lichty said “there was no warning for this. We were expecting an increase of maybe $20,000. This will make a hard budget year harder.”