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2016 Budget first step in right-sizing tax support

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October 22, 2015 - Cuts to capital spending and reliance on reserves and debt to create artificially low tax increases over the last several years have resulted in a now or never situation to right-size tax support for Kawartha Lakes Council.

“We know that we have been underfunding our capital program, using reserves and adding debt to bring about low tax increases for years,” explained Kawartha Lakes Mayor Andy Letham. “I have said repeatedly we could not continue to support all of the assets we have and the budget before us clearly demonstrates that.”

With more than $10 million in budget pressures for 2016 staff are recommending a 12.33% tax increase to significantly close the gap in capital needs and operations.

In an effort to help address the challenges the City has reduced wages and benefits at the City by $2 million for the 2016 budget, and held 2015 spending levels for operations.

“We know there is still a lot of work to be done,” explained CAO Ron Taylor. “The Core Service Review initiated by Mayor Letham and Council in the spring was really the first steps in right-sizing our organization, our assets and our tax support.

“Now we need to set an aggressive course on looking at those assets, services and programs and bringing forward information so that Council can make informed decisions to help the City become financially sustainable and budget longer term,” he added.

Mayor Letham noted that reserves have decreased by more than $30 million from $45 million in 2008 to a projected $15.9 million at the end of 2016 creating an even greater sense of urgency in stopping the downward trend.

“We need to properly fund and invest in our capital programs,” said Mayor Letham. “We need to properly fund our roads, sidewalks, snow clearing; we need to properly fund the programs and services that our residents have told us they want us to do a better job at. This puts us on a path to do that.”

CAO Taylor noted that extensive staff work and analysis show that right-sizing the budget for 2016 is necessary to reduce tax support pressures in future budget years

“No one likes to see these types of tax increases,” he said. “There is no question these are difficult decisions, but they are necessary to get the City to where we need to be in 2016 and beyond while maintaining service levels.”

If Council approves the staff-recommended 12.33% tax increase, based on 2015 assessments and using the average residential home value of $249,000, property owners would see an increase in property taxes ranging from $150.79 to $239.17 over 2015.

Council will continue to deliberate the proposed budget in November and December before finalizing the 2016 capital and operating budgets later this year.

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For more information please contact:

John Chambers

Communications Officer

705-324-9411 Ext. 1355

jchambers@city.kawarthalakes.on.ca

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