The Blue Mountains council will use a 2023 budget surplus to significantly lower the projected local tax increase in 2024.
On Jan. 9, council met in committee of the whole for the second straight day of budget deliberations. Near the conclusion of the meeting, council passed a resolution instructing staff to use $1.3 million from a 2023 budget surplus to lower the projected 2024 tax increase from just over 9.5 per cent to approximately 2.5 per cent.
At the budget meeting 24 hours earlier, staff had told council they expect the 2023 budget to finish with a surplus between $1.2 - 1.7 million. The final tally will be known in a few months when the year-end process is complete.
The decision by council effectively means that $1.3 million from the 2023 surplus will be transferred into the town’s reserve account for future capital requirements.
The draft 2024 budget includes a total local tax increase of 9.58 per cent, however, just 2.38 per cent of this amount was for operational needs. Staff recommended that more than $1.4 million be added to the tax levy to be put into reserve for future asset replacement, which added a further 7.19 per cent to the overall increase.
Coun. Shawn McKinlay brought the idea of using the surplus to lower the 2024 tax increase to the table. Initially, McKinlay suggested the surplus be used for a combination of reserves and reduction of long-term debt. However, staff noted that the town is locked in with its long-term debt through the provincial lending agency and cannot pay it down similar to what is possible with a standard mortgage.
Sam Dinsmore, the town’s acting director of finance and treasurer, said using the surplus to offset the recommended increase for reserve contributions was a good course of action.
“You’re in effect - giving that money back to the taxpayer,” he said.
Council unanimously approved the plan.
“I think that’s a prudent way to go,” said Deputy Mayor Peter Bordignon, who chairs the budget meetings.
