Crunching the Budget Numbers

Jeff Green | Mar 20, 2024

At least once every municipal budget year, someone asks why the Frontenac News don’t always report the same budget increase numbers as the local municipalities report.

The first point is that all the numbers that we report come from the townships themselves. The difference is that some of the townships like to highlight different information for their residents than we report.

In order for readers of the newspaper from the different townships that we cover to be able to make comparisons with other townships, we report the same way for all of them, and the number that we focus on is the “total amount to be raised by taxation”, which we compare with the previous year.

Using that measure, North Frontenac has increased their levy by 5.9% in 2024, Central Frontenac has raised theirs by 6%, South Frontenac raised theirs by 3.9%, and Frontenac County’s levy is up by 3%.

The value of using this metric is that it reflects what the budget process is really all about. Each Council asks their staff to determine how much money is required to maintain the level of service from the year before, and to provide the cost of any enhancement of service that council has indicated it wants to consider. With inflation running high over the last two years, the budget numbers that each of the township we cover have come to so far, generally reflect little, if any, service enhancements, and it even took draw downs in reserve funds and deferrals of infrastructure projects to keep budgets from ballooning even higher.

Both Central and South Frontenac Council like to look at the impact of the budget on the average ratepayer in the way they discuss and report on the numbers that they are looking at. This is legitimate on their part, and allows them to take into account assessment growth and other factors in their deliberations, and there is also a public relations benefit to announce a lower budget increase.

We have no quarrel with this, but prefer to report on the process strictly as a budgeting exercise. The municipal treasurer provides a cost breakdown for the delivery of all services that the municipality must deliver or council has indicated it wants to deliver. The treasurer also provides a breakdown of all funding sources, be that provincial transfers for cost shared services, grants and prescribed transfers from reserve funds, or user fees, and the difference is the amount that must be collected in taxes.

The fact that the way that money is raised is by taxing residents on the basis of property is a feature of our system, and it has its inherent strengths and flaws. On one hand, our properties provide us shelter and comfort, but are also financial assets, we can look at property taxes as offsets against the fact that our properties tend to increase in value year over year. But the biggest flaw in the system is that we do not have that value on hand. So, for people on a fixed income or who have lost their job or had a bad year in their business, for whatever reason, property taxes can be hard to come up with. No one likes paying income tax any more than they like paying property tax, but at least income tax goes down if we make less money in a given year.

When municipal councils set the budget each year, they are not only spending our money, they are spending their own money as well, and they work hard to minimise tax increases without cutting services today, or setting the township up for tax increases or service cuts in the future.

As one Chief Administrative Officer told me recently, “it is not an easy time to be a member of council, money is tight and it is hard for them to find the balance”.

For ratepayers at home, the property tax increase this year will be nothing like our grocery bill increases, the cost of heating fuel, the cost of, everything. A few more dollars will not break us, but none of us rush to open the envelope with the tax bill when it comes in the mail. It means money is coming out of our after tax income, a chunk of money that we knew we needed to put aside but maybe didn't.

It's hard, at that moment, to thank the people who set us up to get that bill, but really all they did was work to make it as small as possible.

Budget Loser – Economic Development

Councillors who sit at the Frontenac County Council table find the county budget process much more frustrating than their own township process. That's because at their own council there is play in the budget. They can save money, defer spending in one area, in order to spend a bit elsewhere. They are actively part of the budget process.

At Frontenac County however, all they can do is listen to manager after manager detail how the money will be spent, and how provincial directives are impacting the cost of delivering their service. After two or three days of this, council gets to look at a single sheet of paper, which has about a half dozen project proposals, and the dollars that are attached to them. Frontenac County spends $50 million each year, about $10 million coming from Frontenac County ratepayers, but Council is left with somewhere in the order of $100,000 to $125,000 to consider at the end of the day. Of the items on the list that council gets to consider, most have relatively small dollar amounts attached to them, less that $15,000 and they will result in a changing the tax increase by less than a 10th of one per cent. This year, the only item of any size that was left for council to consider was the proposal for a new economic development officer, at a cost of almost $100,000, which would make the difference between a levy increase of 4% if they approved it, or 3% if they did.

And, even though the same council had approved all of the studies and action plans that had come to them over the last 18 months which all said this position was necessary in order to accomplish the goals in those studies and action plans, when it came down to it 3% won out over 4%.

North Frontenac is the only council in Frontenac County to have invested in their own economic development officer. The position was put in place three years ago as a contract position, which runs out in July of this year. And the 2024 North Frontenac budget included a proposal to make that position a permanent, full time position. Council turned that proposal down, in order to keep the budget increase down. Matt Walker, who has filled that position for the last three years, will leave when his contract ends in July, unless he finds another position elsewhere before then.

John Inglis, who has chaired the Economic Development Task Force for North Frontenac Council, for 9 years, resigned from the task force a month later.

Central Frontenac, which has the tightest budget of any of the Frontenac townships, is not looking at funding economic development in the near or medium term, although it budgets a few thousand each year for a volunteer economic development committee.

South Frontenac, interestingly enough, approved a $50,000 expenditure in their 2024 budget, about the same amount as its share of the cost of county economic development officer that its own council members were instrumental in defeating during the county budget talks, in order to pay a share of the cost for a City of Kingston economic development person who focusses on rural Kingston and South Frontenac.

It is hard to understand how paying the same amount of taxpayer dollars for a person who works for the City of Kingston, instead of a person who works for Frontenac County, where South Frontenac has considerable influence, is a better option for South Frontenac ratepayers.

In 2024, Frontenac County politicians have made it clear that they do not see economic development as a priority, at least compared to the desire to keep budgets in line.