Let's Talk Budget

Join us in the North Perth Council Chambers on Wednesday, April 3, 2019 between 5-8 pm for the 2019 North Perth Budget Open House. This is a drop-in event.

Why should you attend?

• Ask Council and Staff questions about the budget and its impacts
• Give your feedback on the proposed budget and priorities
• Learn your estimated tax calculation

Provincial legislation states that money coming into a municipality must equal money going out (i.e. revenues equal expenditures). Therefore, each budget adopted by North Perth Council must be balanced.

As shared in our column on the steps to building the budget, one of the first activities of the budget process is to estimate each Department’s (or service area) expenditures and revenues for the coming year. In addition to property tax, there are various types of revenue that fund operating and capital expenditures.

For example, the 2018 Operating and Capital Budget was funded through these revenue sources:

What types of services are funded by user fees/cost recovery?

Fully funded services include the Building Department, North Perth-Spinrite Child & Family Centre (with stabilization funding from the Ministry of Education Consolidated Service Manager) and municipal water and sewer services. Partially funded services include landfill, cemeteries and recreation.

What is segregated surplus?

Segregated surplus is another word used for reserves and reserve funds. Similar to a savings account, reserve and reserve funds receive regular (annual) contributions as part of the budget process. They are a critical component of the Municipality's long-range financial plan as they strengthen our financial sustainability and provide funding for capital projects/infrastructure.

Did you know that commercial properties in Listowel pay into the BIA Levy?

The Business Improvement Area (BIA) Levy is paid into by commercial properties within the Listowel business improvement area designation. The Listowel BIA’s main purpose is to foster a thriving business community. The BIA Board includes representatives from the business community, property owners, Municipal Staff and Municipal Council. Some key activities of the Listowel BIA include maintaining the Listowel entrance signs, holiday decorations, downtown planters and hanging baskets, retail promotion and initiatives/events such as the 2018 “Win This Space” competition.

Every four years, the Municipal Property Assessment Corporation (MPAC) reassesses the value of properties across Ontario and mails out Property Assessment Notices to property owners. Have you ever wondered how the value of your property is calculated or how that value affects the property taxes you pay?How is the value of my property calculated?

MPAC uses Current Value Assessment (CVA) to determine the value of your property. CVA is defined as the estimated sale price of your property in the reassessment year as calculated by MPAC. For the municipal tax year starting in 2017, all Ontario properties were reassessed by MPAC based on market value at January 1, 2016.

How does MPAC assess your CVA? For residential properties, they look at property sales in your area, as well as five major factors that usually account for 85% of your property’s value:

You can also compare the value of your property to others in your neighbourhood by visiting www.aboutmyproperty.ca.

How does my property's assessed value affect the property taxes I pay?

Your property tax is calculated by taking the assessed value of your property and multiplying it by the approved tax rate for your property’s class (e.g., residential, farmland, multi-residential, commercial, etc.). The municipal tax rate is determined after North Perth Council and the County of Perth approve their budgets and the Province of Ontario establishes the Education Rate. The tax rate is applied to your property’s current value assessment (CVA) to determine the amount of property taxes to be levied.

It’s important that you review your property assessment when it comes in the mail. If you don’t agree with the amount, you can appeal your assessment by filing a Request for Reconsideration with MPAC. The deadline to file an RfR will be printed on your assessment notice.

Remember: once you receive your property tax bill in the mail, it’s too late to appeal your property’s assessment to MPAC for the current tax year.

Have questions about your property assessment? Contact MPAC at 1-866-296-6722 or www.mpac.ca

We began the 2019 North Perth budget process by issuing a Pre-Budget Online Survey to collect input from our citizens on what they wanted to see in the municipal budget. Many survey respondents asked why they had not witnessed a decrease in their property taxes when North Perth has experienced such significant growth in recent years. They felt that with the increased assessment base and population, property taxes should have decreased as there are more taxpayers to share the tax burden.

Although new growth does bring additional assessment, it requires additional resources and infrastructure (short-term and long-term) to be provided by the Municipality.

For example, when new subdivisions, streets and sidewalks are built, more snow plowing and snow plows are needed to service new areas. As well, when our population increases, there are more people using our libraries, recreation facilities, roads and other services.

To meet the needs of our growing population and remain efficient, the Municipality has also invested tax dollars and development charges in multiple capital assets in recent years. Examples of these assets include the Perth Line 86/Mitchell Road South roundabout, new Monkton Fire Hall, the Steve Kerr Memorial Complex and the Wastewater Treatment Plant upgrades.

Capital assets are expensed over time in equal annual expenditures and impact the operating budget. This spreads the cost of the asset over a period of time, usually the asset's useful life, and measures how much an asset's value has been used up at a given point in time. This practice is a key part of asset management and helps us track, monitor and plan for our future needs and expenses.

Like most municipalities in Ontario, North Perth is also adjusting to past cuts to our Ontario Municipal Partnership Fund (OMPF) allocation. OMPF is the primary funding source provided by the Province to municipalities. Due to past cuts to our OMPF allocation (since 2005, we have seen our allocation decrease by just over $630,000), we've needed to find revenues elsewhere to cover the shortfall in order to maintain service levels.

Have you ever wondered where your money goes when you pay property taxes? Here at the Municipality of North Perth, we often get asked this question.

To begin to answer it, it's important to know that the amount on your North Perth tax bill doesn't only

include taxes levied by the Municipality, but also the County of Perth and the Province for local school boards. For example, for every residential tax dollar received by North Perth in 2018, about 59 cents was kept by the Municipality, 21 cents was transferred to Perth County and 20 cents was transferred to local school boards.

What services do you receive from the County and school boards for your taxes? Perth County provides many services to North Perth, such as Economic Development, Tourism, Forestry, Land Use Planning, Public Health, Paramedic Services, Emergency Management, County Roads and Bridges, etc.

Based on your School SUpport designation, the education taxes you pay go towards the local public school boards (English or French) or Catholic school boards (English or French).

The portion of your tax bill that is kept by North Perth is then distributed amongst our Departments and the multiple services we provide.

Each year, typically in late fall, the Municipality of North Perth begins working on our annual budget for the upcoming year. The Municipal budget process and concepts can be confusing. To help with this, we will be publishing the "Understanding Your Municipal Budget" column over the next few weeks on different budget topics and questions.

First, we need to understand what the budget is. The budget is North Perth's key financial planning tool that sets out our estimated expenses for the coming year, as well as the revenue sources to pay for those expenses. Simply put, it lays out what we expect we're going to do and how we hope we're going to pay for it.

Because the budget is important, we want to involve residents and taxpayers in making it. We created the Pre-Budget Survey in 2017 as a way to collect public input prior to the formal start of the budget process. Although survey participation has been limited, responses have provided Council and staff with some great information.

Next is the Budget Visioning Session. This happens in late fall and gives Council the opportunity to tell Municipal Department Heads what they'd like to see investigated and included in the upcoming budget.

Department Heads now examine their budgets for the following year, looking at requests from Council and estimating their expected revenues and expenses. The information is collected by the Director of Finance (the Municipality's Treasurer), and reviewed with the Chief Administrative Officer.

Draft operating and capital budgets are presented for each Department to the Budget Committee of Council (made up of all members of Council) through a series of Special Budget Committee Meetings. The Budget Committee considers the budgets presented and requests amendments where needed. You are welcome and encouraged to attend Special Budget Meetings to learn more about the deliberations. Meeting dates, agendas and minutes can be found at www.northperth.ca/budget.

Once a final draft Operating and Capital Budget has been developed by the Budget Committee, we hold a Budget Open House to collect feedback from the public and answer questions. This year's Budget Open House will be Wednesday, April 3rd from 5-8 pm in the North Perth Council Chambers.

When budget discussions are complete (and feedback received at the Open House considered), the Budget Committee will make a recommendation to North Perth Council to adopt the budget. The budget is formally approved by Council with the passing of a budget by-law.