Midland residents could be looking at a tax increase of up to 2% for the coming year.
That was the option chosen by council members at Wednesday's committee of the whole meeting.
The town says the option will keep the tax-rate increase as low as possible, while maintaining the service levels residents depend. However, the move will require, among other measures, that the town not increase contributions to its tax-funded reserve contributions.
The staff also presented two other options. One option is that the town draw from reserve funds to achieve no tax increase. And the second is that the town services continue at their current level, and the town increase its contributions to its reserve funds, and that taxes be increased at a rate determined during budget deliberations.
"The options you've presented are well articulated," said Coun. Bill Gordon, commenting on the presentation made by Michael Jermey, the town's chief financial officer.
Gordon also talked about the other two options in Jermey's report.
"Option two is like living off your credit card, which sadly a lot of our residents do," said Gordon. "Hell, I've even been there at one point.
"Option three is where our residents really want to be," he added. "It sees their services, which they cherish remain intact, and no staggering tax increases. Option one is clearly the balanced approach you're recommending, however, I think we'd be naive to assume it doesn't come with service cuts. I would like to see a list of that so we can decide what medicine is too much and could kill the patient."
Jermey said a review of fees and charges during budget will allow the town to shift the burden from tax levy to a user-pay system.
"Increasing the town’s reliance on user-fee revenue can benefit residents by decreasing the proportion of costs funded from the tax levy," he noted. "However, it also exposes the town to market risks where revenue targets are not met and cost mitigation options are limited."
Coun. Jon Main wanted to know if deferring capital projects could help keep tax rates down.
"I know we can tap into some reserves, and often staff have recommended against deferral of capital or operating items," he said. "(But) is that something we could look at for a short-term, for a year, to keep the tax rates down?"
Jermey said council could certainly use deferrals as a tool to keep taxes low.
"I would suggest it depends on what you're seeking to defer," he said. "It's a tool we've already used on our capital plan to the tune of more than $4 million in response to the COVID crisis."
Main also asked if staff could look at a different budget method.
"Is this an opportunity to explore everything, like program-based budgeting?" he said. "If the goal is to maintain service levels, then you parse and pull out everything to maintain those levels and then everything else goes into a separate program so we can fund it as much or as little."
Jermey said staff uses a service-based budget method because it gives more clarity and transparency to residents.
"It breaks things down to buckets, like fire, transit, and public works," he said. "That tends to be a very effective and understandable way of breaking down a budget for residents."
Deputy Mayor Mike Ross asked Jermey if he could explain for those watching what a blended tax means.
"Blended tax rate is a reference to the tax-rate increase that will result after the local level of government, the council and education tax increases are taken into account, as they all form part of the tax levy," said Jermey.
The decision will be ratified by council at a later meeting.
Earlier the same evening, during its regular meeting, council approved extension of rent relief for small business that are municipal tenants. As well, council also voted in favour of extension of COVID-related relief measures, which waive penalties and interests until Oct. 31. These extensions were approved unanimously without discussion.
