CF Council Looks At Changes, But Pass Budget As Is

Jeff Green | Mar 13, 2024

At a special meeting of council that was called as the result of a petition signed by 5 members of the 9-member council, Central Frontenac heard more from Treasurer Michael McGovern about how township reserve funds are being used and impacted by the budget in 2024.

But first Councillor Bill Everett wanted to know why the meeting was taking place.

“I don't know, who started the petition,” said Mayor Smith.

“The petition can speak to itself,” said Councillor Phillip Smith, “but, I mean, when we left the meeting on February 26, my understanding was that we had a balanced budget, that we were not touching reserves, but when I read the article in the paper and it said our reserves were going to be down to $2million, I thought that was not right, so I contacted Michael.

Mcgovern apologised if he had been unclear about the way the budget was going to impact township reserve funds, and explained that the reserves stand at over $4million now, and the budget will use about $1.2 million from those funds to cover spending requirements, but that amount will be covered by the expected surplus from 2023 operations, which goes directly into reserves. The exact amount of the surplus, which Mcgovern expects will be more than the $1.2million to be used for spending, will not be known until the audit is completed in late May.

What Phillip Smith, did not take away from the budget meeting on February 26th, is that the budget includes a second $1.2 million to be borrowed from reserves in order to finance other required expenditures, and that money is to be paid back into reserves, with interest, over 4 years starting in the 2025 budget year.

“That was my understanding as well,” said Councillor Nicki Gowdy. I left the meeting on February 26th, thinking we had achieved a balanced budget with a 6% increase in the levy, without touching reserves. I did not realise we were dipping into reserves like that.”

A number of options were proposed in order to address the reserve fund loan.

Councillor Duncan McGregor proposed deferring both hiring and equipment purchases in order to bring the levy increase to 0%.

In response, Mayor Smith said, “there are needs. It's like having money in the bank, but your roof is leaking. If you don't fix your roof in time, you will lose the whole house. We've put off the Henderson Road project for a couple of years now, and if we don't fix that road soon it will lose its base.”

On the other end of the scale there was a proposal to bring the levy increase up to 7.6% in order to minimize the loan from reserves, a proposal put forward by Treasurer Michael McGovern as “food for thought”.

In the end, however, Council stuck with the February 26 budget.

The budget, which is coming to council for adoption either this week or on March 26, includes a 6% increase in the levy to ratepayers. When combined with the county tax rate, which is up by 3%, and the education rate, which is not going up at all, to make up the tax bill that ratepayers will receive in May, the total tax rate will be up by 3.5%, an impact of about $67 for every $100,000 in tax assessment on their properties.

The township reserve fund position will likely end up at about $3million once the surplus from 2023 is factored in, down about $1million.

When the vote was taken, Councillors Smith, Gowdy and McGregor voted against the budget, and councillors Klages, Kelsey, Irwin, Meeks, Everett, and Mayor Smith voted in favour.

When asked, McGregor said “Our budget should reflect what we can afford, we need to either raise taxes or cut from the budget. If we keep pulling from reserves we are just creating an issue for future council.”