Mayor’s Remarks
Budget 2009-2010 & Tax Rate
Council Meeting
June 15, 2009

Budget (pdf)

The Town of New Glasgow is maintaining its residential tax rate at $1.77 per $100 assessment for the 2009-10 fiscal year. This is the first budget set by the new Town Council and we have responded to the messages we heard as we travelled door to door and spoke one on one with our citizens. It is clear that our citizens viewed a stabilized tax rate as very important to our community.  We have put this priority request into action although looking forward we realize this rate may not be sustainable in the future.

This is the second consecutive year for the residential tax rate is to be at $1.77 and it is worthy to note that this rate is also lower than the rate of 2006-07, which was five cents higher. To hold the residential tax rate while ensuring service delivery quality was no easy task. The provincial cap on residential assessments continues to place strains on municipal revenues. For the Town of New Glasgow, this cap has resulted in lost revenue of $822, 643 for 2009-10. In addition to these lost revenues are the very significant cost pressures of the PANS pension, which is not administered by the Town, as well as the accumulated PANS related deficit.

The stabilization of the residential tax rate came as the result of very careful budget analysis and diligent review of all town operations. In order to hold the tax rate but yet maintain a strong level of service, we have had to take a stronger business approach and be innovative and committed to continuous improvements in our best practices. In today’s global economy, we must all we willing to do business differently. We recognize we are impacted by the state of the national and international economies and that we must adjust our practices accordingly. We are providing the best possible level of service at the least possible cost.

After writing the payment of $1,100,000 for the PANS pension, and prior to the budget development, we knew our budget would require in-depth analysis and review. We established a Budget Advisory Committee consisting of myself, CAO Lisa MacDonald, our former Corporate Services Director Scott Fraser, and Co-Chairs of Finance, Councillors Clyde Fraser and Terry Curley. This committee has met frequently for the past several months, working diligently to bring forward recommendations to Council. Council gave careful consideration to the recommendation brought forth by the Budget Advisory Committee when deliberating and assessing the budget drafts. This process was followed by valuable input from citizens representing from all three wars, who served on the Town of New Glasgow’s Budget Committee. This is the second consecutive year the Town has had citizens on the Budget Committee. Council is grateful for their feedback and insights during the final budgeting process and we thank them for their interest in the well being of our town.

 
An example of reducing costs within our operations budget is that we are making sure equipment purchases are effectively utilized and have a long lasting benefit to the community. Another example would be the identification of both immediate and long-term solutions to reduce our workers compensation costs and stabilizing costs on health, wellness and safety through improved health and safety policies and programs for our employees

The commercial tax rate will increase from $3.92 to $4.02 per $100 assessment. The rate is adjusted to reflect continued decline in revenues resulting from the loss of the business occupancy tax from a significant amount of businesses and the process to create one commercial tax. The Business Occupancy Assessment Tax was considered by many to be outdated and inefficient and the phase out schedule is from 2005 to 2013. This phase out is establishing a commercial tax whereby a single transparent tax and tax structure is the basis for generating the commercial tax revenue necessary to provide municipal services. Business Occupancy Assessment tax creates the perception of double property tax on business and hinders attempts to retain and attract businesses to Nova Scotia. The phase out has been implemented to simply the tax structure and is not intended for the purpose of decreasing taxes.

New Glasgow continues to see commercial growth and investment. Council is committed to working with developers and investors and to providing a climate for business as well as a level of service and quality of infrastructure that stimulate economic growth. During the past year we have seen significant investment in our Downtown throughout the Downtown Revitalization Plan and this investment is continuing with great strides and improvements being made. We have also welcomed large commercial properties such as Winners and Future Shop along with some residential developments. Overall construction value in the town has increased over the previous year with a value of $11,560,528 in total building permits as of March 31, 2009 compared to $9,195,357 in the previous year.

The Town’s sewer rate will increase from $3.11 per 1000 gallons to $3.50 per 1000 gallons. This increase will mean a payment of $64.40, or $7.18 more per quarter for the average household. This increase is needed to continue investment in our infrastructure, such that we are in a position to maintain our level of service as well as to facilitate new growth and development. Extreme weather conditions of recent years have placed strains on our sewer and storm water separation systems such that we need to upgrade and invest to prepare for the changes in weather patterns that we are now experiencing. Should we have decided not to invest in our infrastructure at this time, the cost would be much greater and unmanageable in the long term.

Holding the residential tax rate while increasing commercial taxes and sewer rates will enable the Town of New Glasgow to continue to serve our residents and our community well while offsetting the demands placed on finances for increasing operational costs and other cost pressures.

For the fiscal year 2009-2010, the Town of New Glasgow will operate on a budget of $15,737,080 compared to $14,466,770 in 2008-09. The majority of budget increases can be attributed to the following factors:
• the PANS pension and accumulated PANS deficit
• significant increases in costs for products and services, including fuel, which has affected transportation, paving and asphalt costs. And as most of us are aware more increases in fuel costs are projected to continue.
• capital and infrastructure investment requirements and improvements
• increases in levies from outside agencies ( i.e. Pictou County District Planning Commission, Pictou Regional Development Commission, East River Environmental Control Centre, Mount William Landfill, Regional Emergency Measures and others)

Our existing regional services are currently based on a uniform tax assessment funding formula. New Glasgow Town Council is on record as supporting a user pay formula as we do not consider uniform tax assessment a fair funding formula for these essential services. Such a formula results in New Glasgow subsidizing other users’ costs. A more equitable user pay system will allow us to achieve more stability in our operational costs and budgeting.

Town Council has made some very tough decisions and this budget proved to be very challenging. There will continue to be immense challenges in the days and years ahead and we will work hard to provide an environment for growth while keeping tax rates fair and service levels strong.

 
I would like to once again thank our citizens who participated on the Budget Committee for their diligent and open minded participation. I also extend my sincere appreciation to all members of Council, to our CAO Lisa MacDonald and to our department heads, for providing financial accountability, transparency and zero based budgets that will support progress and growth for the Town.