Combination of internal loans from reserves and outside bank loans offsets $820,000 deficit for the coming year’s finances
CENTRAL MANITOULIN – The Municipality of Central Manitoulin passed its 2021 budget with an ambitious capital program that would have seen a $820,000 deficit—representing roughly a 34 percent hit to the mill rate based on an estimate of $23,962.87 per percentage point increase in the municipal levy—but thanks to a combination of internal loans from reserves and loans from outside financial institutions, the 2021 municipal mill rate increase has been held at 1.5 percent—holding the line to the same increase as the 2020 budget.
The mill rate determines how each property’s tax assessment is calculated. Roughly, Municipal Property Assessment Corporation (MPAC) property assessments for all the property in the municipality is comparted to the levy needed to meet the municipality’s anticipated expenditures. So with a 1.5 percent increase in mill rate, each $1,000 in assessed value of a property translates into $1.50 in property tax increase. The mill rate is set by dividing the total cost of the levy by the total assessment of the municipality.
The total levy required by the municipality is not related to the mill rate; the mill rate is the basis upon which the levy is divided up amongst ratepayers. If the MPAC assessment drops (ie. property values across the municipality drop), the mill rate must increase in order to raise the necessary funds to cover the levy.
The motion, “that council approves the 2021 municipal budget with a 1.5 percent increase in the mill rate and further that we authorize the treasurer to move funds from reserves and obtain loans as necessary to balance the budget,” was moved by Councillor Derek Stephens and seconded by Councillor Rose Diebolt.
Councillor Angela Johnston offered that she enjoyed the budget process and was pleased with the headway council is making on projects that had previously been shelved.
For her part, Councillor Diebolt gave the budget an “A+.”
Councillor Steve Shaffer echoed Councillor Johnston’s comments stating, “everyone worked on it wholeheartedly.”
Councillor Stephens said he thought that ratepayers would see the increase to the mill rate and think ‘my taxes are going up again.’ Councillor Stephens asserted that the real blame lays with the “incredibly high assessments Manitoulin Islanders are currently facing.” Councillor Al Tribinevicius agreed.
The amount that needs to be drawn from reserves as a loan to the municipality and the amount to be sought out as an outside bank loan is currently under review. Municipal staff indicate that every effort is being made to maximize the funds being drawn from reserve differs so that the town will be paying itself back at 3.1 percent (approximately, actual rate is to be determined).
The culprits in the current $820,000 shortfall in the town’s bottom line are legion. Among the draws will be the cost of replacing the Union Road bridge, tallied at $1.4 million. Most of the cost of that outlay is borne by provincial grant money, leveraged by the municipal contribution of $100,000. Major roadwork to the tune of approximately $500,000 and a capital buildings budget of $760,000 help pump up the volume. As staff pointed out, Central Manitoulin has a large number of buildings in its portfolio and, although the amount of work each requires, the culmination is substantial. Overall, the municipality is shouldering a $4 million capital budget.
A sum of $150,000 is included in the budget allocated for the demolition of the Old School building, while the recreation infrastructure committee was allocated a reserve of $200,000. That reserve was cited during a previous council meeting as saving for a potential future recreation complex. The municipality did not receive hoped-for funding for a multi-use complex to replace the Mindemoya arena last year.
Mayor Richard Stephens thanked both staff and members of council for all their efforts on the budget. Councillor Stephens reciprocated with high praise for the mayor and his work on the budgeting process over his terms on council.
