Kincardine Council has met to discuss what direction to go in when it comes to planning the 2010 budget.
Chief Administrative Officer John deRosenroll says there are six “red flags” council has to deal with — and they total an approximate 1.4 million dollar loss in revenue.
One is the 621 thousand dollar drop in Ontario Municipal Partnership Funding — something Mayor Larry Kraemer says the province is not backing down on.
He says Bruce County and the affected municipalities tried to lobby for the province to reduce the impact, but they’ve been told it’s the way it is.
Other “red flags” the 373 thousand dollar first payment for the addition to the medical centre, 100 thousand dollars less from investment income due to low interest rates, and an anticipated 150 thousand dollar drop in the payout from Bruce Telecom.
In response, deRosenroll has introduced a plan to come up with 1.4 million dollars in savings.
It includes a 6.5 percent reduction in the operating budget, a draft tax rate increase of the same amount, and finding 500 thousand dollars of savings on capital projects.
DeRosenroll says it’s a balanced approach to deal with increasing revenues, reducing capital and operating expenditures, and making sure each department has an equal role to play in coming up with a budget solution.
Councillor Guy Anderson says they have to raise taxes to make up for the lost money and decide what to do with reserves.
He says spending needs to be a little more conservative, because they do not want to raise taxes too much.
Kraemer says the plan is reasonable given the challenges, noting a 6.5 per cent tax increase when revenue is short by 20 per cent is “pretty darned good.”
The heads of each department are content with pursuing fewer capital projects in 2010.
Councillor Ron Hewitt says this year’s Saugeen Conservation Authority levy is also projected to be 1.5 to two per cent — much lower than past years.
The municipality currently has just over 20 million dollars in reserves, Treasurer Brenda French says the amount would be much lower if all capital projects underway were being completed on time.
Councillor Randy Roppel wants to see reserve money earmarked for a possible rebuild of the Kincardine hospital.
Kincardine Council is expected to continue the 2010 budget process in February.