`Creative' budgeting to reduce tax hike
CYNTHIA GAMBLE Staff Writer A new method of budgeting, which Halton Hills Chief Administrative Officer Dennis Perlin describes as more transparent to taxpayers, will result in a decrease of 1 per cent on the Town's projected 2007 tax increase. At a special afternoon meeting on Monday, budget committee, which includes all members of council, gave the go-ahead to staff to pursue a capital charge-back percentage amount while preparing the 2007 budget. Charge-back is method of accounting staff time and overhead spent on a specific construction project, and that cost will now be "charged" to the overall budget of that capital project-- the Town is using a flat rate percentage fee of 3% per project. It's a method of directly attributing the town costs of managing a capital project to its actual cost. That charge-back from the capital budget will be transferred to the operating budget. For example, a construction project valued at $100,000 will now be charged a three per cent charge-back ($3,000). So the construction project will now be $97,000 plus the $3,000 charge-back. "Indeed the taxpayers are already paying for that 3 per cent. It's hidden. It's hidden in the operating budget. What we're trying to start is a process of attributing the proper cost of every project to that project," said Perlin. "It is really to help the taxpayer understand what the true cost of a particular project is-- right now they don't get that understanding if they just look at the capital costs."
Fogal fears service cuts with new budgeting tool
Continued from pg. 1 The bonus of the new budgeting is it a method to reduce the property tax impact of each capital project. Every year there's about $6-7 million worth of construction projects-- roads, bridges, parks, etc.-- that the charge-back could be applied to. This translates to about $200,000 or a 1 per cent tax increase that is "charged back" from the capital to the operating budget. In August, budget committee gave staff approval to prepare an 2007 budget with a base budget increase of 3.1 per cent plus 2 per cent for the pavement management program and 1.3 per cent for the hiring of firefighters-- an overall 6.4 per cent increase. But with the new charge-back, that increase is now 5.4 per centor an overall 3.2 per cent with Town, Region and Education taxes combined. "This is one method you have available to you to reduce the 2007 operating budget," explained Finance Director Ed DeSousa, adding similar amounts will have to be included in base budgets in future years to avoid a tax impact. But the downside says Wards 3/4 Regional Councillor Jane Fogal is a reduction in services (or the amount of funding for the actual cost of construction). She said it means 3 per cent of capital funding is no longer available for a project. "It is written as reducing taxes, but it's also a reduction in services-- we have less money to deal with," she said. "Things are going to be cut back." "I understand about JANE FOGAL wanting to account for staff time, but I'm not at all sure about reducing service. I think our service levels are already pretty minimal," she said. "I think it's a good news report," said Ward 4 Councillor Bob Inglis. "I don't quite see it as a reduction of services. ...It's a much more open way and I think that's good for our taxpayers. "Staff has been creative," agreed Mayor Rick Bonnette. "We're dealing with real costs here... Other municipalities are doing it and I think we've been falling behind by not doing it." The 2007 budget deliberations will begin in earnest in January. (Cynthia Gamble can be reached at firstname.lastname@example.org)