Municipality of Temagami

BUDGET COMMENTARY

Staff and Council have worked diligently to prepare this draft budget, understanding that there are tough decisions to be made about allocating resources. Council is striving to balance these allocations in a manner that is equitable, sustainable, and logical given the limited funds available. This is not an easy task, and Council takes this responsibility very seriously.

Operational Budget

The operational budget for the Municipality of Temagami is designed to ensure that essential services and day-to-day operations are adequately funded. This includes everything from road maintenance, public safety, waste management, and recreational facilities to administrative costs and staff wages. Given the rising costs and limited funding, Staff and Council have worked diligently to prioritize spending and find efficiencies wherever possible. Despite these efforts, some difficult decisions have had to be made to maintain a balanced budget. Our goal is to continue providing high-quality services to our residents while managing our financial resources responsibly. Please see the attached document for the operational budget estimates for 2024.

Reserves

The Municipality of Temagami currently holds approximately $3,398,000.00 in reserves. While the majority of these reserves have been allocated to specific capital items, such as infrastructure improvements and essential services, a portion remains as discretionary reserves to address unforeseen needs and opportunities. Please see the attached documents for a breakdown of Municipal Reserves.

Maintaining a healthy reserve fund is crucial for the financial stability and sustainability of a municipality. According to online research, Ontario municipalities are generally recommended to maintain reserves equivalent to approximately 50% of their annual operating expenses. This ensures that they are adequately prepared to handle emergencies, fund future capital projects, and manage cash flow effectively. For the Municipality of Temagami, maintaining healthy reserves will allow us to continue providing essential services and to invest in the long-term wellbeing of our community.

Capital Items

Attached to this commentary, you will find a listing of discretionary capital items that have been identified as priorities over the next three years. Additionally, you will find details on the discretionary capital items list attached. Please help prioritize the listing by completing the survey found at the link below. Additionally, please list any other projects you feel should be considered.

It is important to note that the Municipality of Temagami is expecting the next phase of our asset management plan to be completed by the end of this fiscal year, and some of the priorities may shift based on needs identified in this document.

Proposed Tax Rate Increase

Council is considering a 6% increase in the property tax rate for the 2024 budget year. Every 1% Increase to the tax rate, results in approximately $45,000 of tax revenues.

Current Residential Property Tax Rate: 0.00883200

Education Tax Rate: 0.00153000 (no change from 2023 to 2024)

Impact on Residential Properties

We used the following three MPAC Assessment values to demonstrate how a 6% tax increase would impact your tax bill. If your current MPAC value is $500,000, a 6% proposed increase would result in an additional $264.96. This 6% increase has no impact on Education taxes or area-rated charges for water, sewer, grinder, and garbage.

$100,000 Assessment

Current Property Tax: $883.20

Educational Tax: $153.00

Proposed Tax (6% Increase): $936.19

Difference: +$52.99

$500,000 Assessment

Current Tax: $4,416.00

Educational Tax: $765.00

Proposed Tax (6% Increase): $4,680.96

Difference: +$264.96

$1,000,000 Assessment

Current Tax: $8,832.00

Educational Tax: $1530.00

Proposed Tax (6% Increase): $9,361.92

Difference: +$529.92

Area-Rated Charges

The area-rated charges for water, sewer, garbage, and grinder pumps are expected to see a slight increase this year. The figures below include both operational and the 10% for future capital improvements/replacement.

Current Charges for 2023

Water Rate: $1,288.19

Wastewater Rate: $397.25

Garbage Rate: $103.79

Grinder Pump Rate: $385.96

Total: $2,175.19

Transfer Station Rate: 0.000551

Estimated Charges for 2024

Water Rate: $1,421.69

Wastewater Rate: $459.32

Garbage Rate: $120.83

Grinder Pump Rate: $434.98

Total: $2,436.82 (12.0% increase)

ICIP Green Program – Temagami North

This project is a series of initiatives under the ICIP Green Program aimed at improving the water and wastewater infrastructure in Temagami North. The total project costs amount to $4,153,100, with funding contributions from the Federal Government ($1,661,240), Provincial Government ($1,384,228.23), and the Municipality ($1,107,631.77). The specific projects include the Temagami North Lagoon Disinfection project (UV Filtration) costing $2,000,000, updating the chemical pump panels at the water treatment plant for $453,100, and the rehabilitation/replacement of the standpipe (water tower) at $1,700,000. These projects have been approved for funding and are being undertaken in response to a priority directive from the Ontario Clean Water Agency, as well as an order from the Ministry of the Environment (MOE). The Municipality has also taken steps to secure a long-term loan through Infrastructure Ontario for its portion of the project costs. The repayment of the loan for these projects will result in increased water and wastewater rates, for the users on the system in both Temagami North and Temagami South, when the loan has been finalized.

Estimated Charges for 2024

Water Rate: $1,421.69

Wastewater Rate: $459.32

Garbage Rate: $120.83

Grinder Pump Rate: $434.98

Total: $2,436.82

Estimated Charges for 2025

Water Rate: $1,688.54

Wastewater Rate: $696.28

Garbage Rate: $120.83 (will be reviewed in 2025 budget)

Grinder Pump Rate: $434.98 (will be reviewed in 2025 budget)

Total: $2,940.63 (17.0% increase)

The Ontario Clean Water Agency has identified significant work needed for the Temagami South Water Treatment Plant. The estimated cost for these upgrades is approximately $3,000,000, which will affect the area-rated charges for water. To help cover these costs, staff have been diligently seeking various funding opportunities as they become available. The Municipality is currently awaiting response on a funding application, which would cover 73% of the project costs.

Allocation of Tax Revenues

The municipality collects approximately $7,130,000.00 annually. The table below outlines the mandatory costs outside of the municipality's discretion, totaling approximately $4,740,000. This leaves us with only 33 cents on every tax dollar raised for municipal operations and capital costs.

The increase in the costs above, results in approximately $121,000.00 which would require a 2.7% increase in the tax rate. Council has proposed a 6% increase in the tax rate for 2024. This would cover the almost 3% increase in mandatory costs and a 3% increase to offset rising costs and any additional capital improvements.