Town of Collingwood staff are in the midst of preparing the 2024 budget, and were given direction from council this week to keep base budget spending to a two per cent increase.
This came despite town staff informing council that a 3.5 per cent increase would be needed to maintain current levels of service.
During the Sept. 25 committee of the whole meeting, treasurer Monica Quinlan provided a presentation to councillors on proposed budget guidelines for 2024 and a schedule for community engagement.
According to the staff recommendation, staff would have prepared a budget with an overall five per cent increase: 3.5 per cent for the base budget to maintain current service levels and would provide council with a list of priorities for consideration to account for the other 1.5 per cent.
“What we’re hearing from our neighbouring municipalities and the County (of Simcoe) is anywhere between three and seven per cent is being requested this year,” said Quinlan.
Coun. Deb Doherty put forward an amendment to have staff prepare a budget with a base budget of a two per cent increase with an additional list of priorities for council’s consideration.
“Based on the year we’re moving into in 2024 with a lot of uncertainty about interest rates, mortgage rates – normally I’m happy to go along with an initial recommendation like this because it’s a negotiation,” said Doherty. “This year, I feel like we need to be conservative.”
According to the staff report presented by Quinlan, one of the key factors impacting this year’s budget is the consumer price index (CPI). As of the end of August, in Ontario it sits at 3.8 per cent, following a 3.2 per cent increase in July 2023.
“This was higher than what was expected and is due mainly to energy prices and more specifically related to electricity and fuel,” wrote Quinlan in her report.
The town has also experienced a slowing in construction as have many municipalities across Ontario, with 42 building permits issued for new dwelling units so far as of July this year in comparison to 91 in 2022 and 178 in 2021.
“Housing re-sales are starting to slow, which is indicative of the pressure from raising interest rates,” wrote Quinlan.
Additional pressures on the 2024 budget in Collingwood include the bid prices for the water treatment plant, council resolutions brought forward in 2023 as part of the 2024 budget and ongoing pressures of increasing costs and an uncertain supply chain.
Quinlan outlined ways council could reduce budget pressures this year, including deferring some capital projects, increasing municipal borrowing, making certain projects grant-dependant, increasing reserve funding or adjusting service levels.
During discussion, Mayor Yvonne Hamlin asked if council could be presented with budget scenarios based on different population growth scenarios.
“Including zero per cent,” said Hamlin.
Coun. Kathy Jeffery referenced the economic forecast across the board.
“I don’t think they’re as bright as we might be hopeful. I know banks are preparing for power of sales. That’s going to impede the necessity for growth,” she said. “Growth is finite.”
Chief administrative officer Sonya Skinner cautioned against reducing the base budget spending to a two per cent increase.
“I don’t see any way to maintain the current levels of service and hit two per cent. We can certainly try...it’s a difficult proposition,” said Skinner.
At the end of discussion, the committee voted unanimously in favour of Doherty’s amendment. The decision will need to be ratified at the next regular meeting of council.
The first draft of the 2024 budget is expected to be released to the public on Oct. 16. Multiple dates for public consultation are planned, with a goal to ratify the final budget by Dec. 18.
