(File Photo/northeastNOW Staff)

By Mat Barrett

Melfort Budget

Melfort council continues budget deliberations, tax increase expected to be about normal

Mar 5, 2021 | 9:58 AM

We’re starting to get a clearer picture on what Melfort’s operating budget and tax increase for 2021 is going to look like.

After the first budget meeting in Melfort on Feb. 26, a 4.12 per cent tax increase is what was on the table as council and administration looked at options to fund the deficit and bring the tax increase down to a more comfortable number.

Add in some requests from council to hire two seasonal workers in the Public Works Department, a 4.75 per cent tax increase is what stood in front of council as they sat down for another meeting on Thursday, March 4.

However, that’s not what taxpayers will ultimately end up paying. Council and administration is looking to drop the tax increase significantly, and it looks like there are two options on the table.

Option one came as mayor Glenn George was adamant on trying to limit the tax increase to 1.72 per cent which would account for the cost of living index.

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“It’s been a tough year for everybody,” George told northeastNOW. “And for us to try and get any more than that, it’s putting a hardship on our citizens, period.”

To drop the tax increase down to that 1.72 per cent mark, council is looking at taking $150,000 from the expected $200,000 surplus from 2020 to cover the over $312,000 deficit. The remaining about $60,000 would come from the mill rate stabilization fund.

The other option is to go with a 2 per cent tax increase, use $150,000 from the surplus, and use less money from the mill rate stabilization fund. George said going up to 2 per cent would be another comfortable number to be able to meet their obligations to their citizens.

“Things that citizens expect us to do, is going to cost more than that,” he said. “So where do we draw the line?”

Council has seemingly settled on about $150,000 coming from the surplus. Normally, a year’s surplus would be split between the Facility Maintenance Reserve and the Special Capital Fund. Currently, the facility reserve is pretty low after the city needed to use some of those funds to help repair the Northern Lights Palace pool. It’s expected that the remaining $50,000 of the surplus would go into that fund to make sure they have that money if needed. This means the Special Capital Fund would be left out, however there’s over $600,000 in there at the moment and council would be okay leaving that fund out for this year’s surplus.

The Mill Rate Stabilization fund is where the debate arises depending on how much money council decides to use. The fund has been paid into over the years and according to George, in his 11 prior years on council, they haven’t used that fund to help with the deficit. However, the main idea of the fund is a way to offset the deficit in a tougher year.

“That’s what it’s built up for,” George said. “It’s built up so that if we have a ‘rainy year’—and this is a ‘rainy year’ with COVID-19—then we’ll use it, and that’s why I think we should use it.”

The downside to that is it must be paid back with the some funds of a surplus in the years following taking money from it. The repayment of that fund would then take away a bit from the other funds that would normally benefit from a surplus. However, George said there are other ways to find money for projects, or facility maintenance if they need to in the future.

The topic of the special levy in relation to the Wellness Centre and repaying that investment was brought forward again. Previously, council was considering a special levy of about $35 for property owners, but they have since decided against that for 2021.

Council has yet to set a date for their next meeting to deliberate the budget, but in the meantime, administration will put forth scenarios of a 1.7 per cent tax increase and a 2 per cent tax increase for council to look at and determine the best course of action for their operating budget.

Administration is also in the process of receiving property assessments, which will assist in the tax increase dispersal once the budget has been approved.

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mat.barrett@jpbg.ca

On Twitter: @matbarrett6