The District of Lantzville is looking at delaying road work and financing a fire truck and dump truck over five years in order to limit a projected tax increase for 2021.
The municipality started its financial planning process last month, and on Monday, Nov. 9, councillors made a series of motions that trimmed the potential tax increase from 24.2 per cent to 7.7 per cent.
The most significant budget adjustment was cutting $150,000 from a recommended $200,000 increase to the roads reserve fund contribution. The decision could result in certain road work being deferred beyond 2025, noted a staff report.
As well, financing a $350,000 fire truck and a $110,000 dump truck starting in 2022 instead of buying them outright that year will save the district $100,000 in contributions to reserves in 2021.
Another noteworthy change to the budget came after the district learned last week that more than $70,000 in operating costs will be covered by COVID-19 recovery funding for local government administration.
Lantzville’s director of financial services Jamie Slater told council Oct. 5 that the district has an asset management funding gap of about $437,000 annually, and recommended an extra $271,800 go toward addressing that gap. By reducing the road reserve fund contribution, council is instead budgeting a $121,800 increase to reserve funding in 2021.
Slater said Lantzville’s mill rates have “absolutely benefited taxpayers over the years,” but have created infrastructure funding gaps. As examples, she pointed out that buying a fire truck and dump truck without financing in 2022 would have drained those reserves to zero.
“We’re significantly far behind in terms of the amount of money that we’ve contributed to reserves and that’s just for our core municipal infrastructure – things like roads, things like public works equipment,” she said.
Coun. Ian Savage had asked that the roads reserve fund contribution increase be cut $200,000 to keep it at 2020 levels, but the majority of council supported the $150,000 cut that staff presented as an option.
“There’s a lot of roads in Lantzville that if we don’t replace them, I think we’re going to go back to covered wagons going up and down the hills because that’s all that’s going to be left, is some ruts,” said Coun. Will Geselbracht.
Mayor Mark Swain, toward the end of Monday’s budgeting session, expressed surprise that council had whittled the projected tax increase down to 7.7 per cent and wondered if council was removing too much from reserve contributions.
“We’ll see where [the financial plan] goes in terms of asset management, maybe it’s a little low,” Swain said. “But we’ll let things percolate and we’ll see what we do with this financial plan. There’s still time.”
The district is expected to hold first, second and third readings of a financial plan bylaw on Nov. 23 and could adopt the bylaw Dec. 7.
The District of Lantzville’s property tax increase was 19.9 per cent in 2020.