West Nipissing Wants to Raises Taxes by Another 7%

6 hard facts about the financial situation in WN.

This week, West Nipissing Council had their first budget deliberation meeting and residents received the devastating news that their taxes may be going up nearly 7% once again. I’ve voiced my concerns on this municipality’s unsustainable increases before. As you might recall, this town has increased it’s taxes by over 23% in just the last 4 years.

This was just the first meeting in the budget process. It mostly included the CAO presenting the state of the financial situation and his proposal for the 2023 budget.

I have many issues with this presentation. I don’t believe that our financial situation is sustainable and the proposed increases are not justified.

Today I share 6 hard facts about this year’s proposed budget.

1. The Previous Council is Not to Blame

At Tuesday’s meeting, the CAO made many insinuation that the previous council was to blame for needing a larger than normal increase this year. The CAO seemed to infer that the previous council did not raise taxes enough for political reasons and because of these decisions, the municipality needs to catch up on revenues.

This is FALSE. The previous council authorized the following tax increases

• 2019: 5.74% (2.27% inflation)

• 2020: 6.2% (1.95% inflation)

• 2021: 2% (0.72% inflation)

• 2022: 1% (3.4% inflation)

Cumulative Tax Increase 2019-2022 = 15.7%

Cumulative Inflation 2019-2022 = 8.6%

I’ve been critical of the previous council. I was critical when they increased taxes. They deserved it. But they don’t deserve to be criticized for both raising taxes beyond inflation and not raising them high enough. The previous term saw our taxes increase at almost twice the rate of inflation. And this was while the municipality received a huge sum of COVID relief from other levels of government and while our municipality reduced almost all their service levels.

2. HR Costs are Rising by 9% (and possibly by more than 10% next year)

In the proposed budget, employee costs will go up from $8.4M to nearly $9.2M. This is mostly due to the addition of three new positions being created. As the CAO pointed out at the meeting, the actual annual cost of these new positions is not fully accounted for as they will be starting mid-year. This means that the real annual increase to HR expense is likely well over 10%.

I’m not sure if the municipality is in a position to be hiring more staff or giving anyone a raise beyond inflation when the majority of the residents in West Nipissing have not received any increase whatsoever.

3. $80,000 on Advertising??

Yes that is not a typo. The 2023 budget has $80,000 for advertising. West Nipissing is not Coca Cola and it is not Nike. So why is it spending $80,000 on promoting itself?(contributing more than half a percentage of tax increase)

I understand the need to advertise job postings and to share important public messages. But with the use of social media, the municipality definitely does not need to be spending this enormous sum on advertising.

I’m not proposing that the municipality should eliminate all advertising costs but a substantially smaller budget strictly used to advertise job postings and key community events is warranted in light of the economic situation.

4. $146,000 on Legal Fees?

In 2022, Corporate Services used $146,000 on legal fees… This was nearly 300% over budget (2022 budget was $50,000).

In 2021, this item amounted to $77,000.

In 2020, this line item didn’t even exist…

What happened between 2020 and 2022 that requires our municipality to spend the equivalent of two full-time employees on legal fees for the administration?

It’s important to note, that this $146,000 is not the mayor and council’s legal fees for the services of the Integrity Commissioner. Even though the previous had much conflict and many were concerned with their use of the Integrity Commissioner, they did not overuse that budget of $25,000 (they used $26,000 in 2022).

Could this $146,000 (or the equivalent of a full percentage point of tax increases) be related to trying to sustain a legally questionable COVID vaccine policy that led to lost wages by some employees?

Could this $146,000 be related to the ongoing conflict that obviously existed between not only councillors but also between administration and council?

The administration wants this budget item that did not even exists 3 years ago to be raised by a staggering 30% (from $50,000 to $65,000). Why?

5. 7% is Just the Beginning

Last year, council approved the usage of $1.5M of funds from the municipal reserve to limit the tax increase to 1%.

This year, the CAO stated that the tax increase would be 13% but that he whittled it down to 6.65% while dipping into the municipal reserves for another $1.2M. The CAO stated that the ongoing use of the reserves is not sustainable as this year’s budget would bring that fund down under $3M. He rightfully stated that that the municipality has to find a way to operate without relying on reserves. Likely meaning they will not be able to dip into this reserve a 3rd year in a row in 2024.

So, even if council approves this budget, when they meet again a year from now, they will start with hefty increase even before starting their deliberations. Which means we could be looking at back-to-back double-digit increases in 2024-2025.

6. West Nipissing Needs to Have Difficult Conversation About our Future

Our financial situation is unsustainable. There’s no doubt about it. Even though we were ranked as one of the lowest taxed municipalities in 2018, we have quickly lost that title. With this budget, the average homeowners taxes will have gone up over 23% in 5 years. If we don’t find savings now and have to resort to a 10% increase for the next two years because we can’t rely on reserves anymore, we will be looking at surpassing a 50% cumulative tax increase between 2018-2025.

These unsustainable increases are before even starting the discussions around the massive Verner water main project and the proposed Au Chateau expansion. Both are huge budget items that will need to be addressed in the next couple of years.

The municipality needs to have difficult conversations. Taxpayers can afford one bigger than normal tax increase once in a while. But this proposed budget will see taxpayers faced with THREE 6%+ tax increases in less than 5 years. That is not fair and it is not justified. The average WN resident hasn’t seen any meaningful difference in services. They have not seen a single new facility or operation added since 2018. How can we be expected to pay this organization 50% more by 2025, without anything to show for it? Other than a newly created legal fund and shiny new advertisements.