By Mike Renzella
The Haldimand Press
HALDIMAND—During a recent Council meeting, Haldimand County Council reviewed their budget guidelines for the 2022-2026 term, revealing a 3% targeted average annual residential tax increase.
County staff expect this target will be exceeded in 2023 due to overall inflation projections sitting at approximately 6%. The overall intent of the guideline is to create a cumulative average over all four budget cycles of the current Council term, reflected in this year’s 3.28% increase as previously reported in The Press. This target covers potential base budget changes, capital levy, assessment growth, and educational tax room.
Manager of Financial and Data Services Mark Merritt said inflation is to blame for the increased rate, up from a 2% annual target during the previous term: “It’s difficult to predict where inflation is going…. Even to get to the 3% was very challenging.”
Merritt said that County staff did some sensitivity analysis looking at the various inflationary impacts on base budget items such as salaries and fuel costs, in addition to increased insurance rates and capital pressures.
“We have committed to come back at mid-term and review that, which is something unique; we’ve typically tried to set it and leave it to adhere to it for the term of Council. Hopefully at mid-term of Council we’ll have a better idea of where the inflationary impacts are.”
In the interim, staff will continue to carefully review the cost of existing services, business processes, and financial strategies to identify efficiencies or opportunities.
While the County will work toward a budget that is in line with these guidelines, a staff report warns of many potential cost implications beyond the County’s control, which may ultimately push that 3% target out of achievability.
“Based on the projections we’ve done, we feel over the term of Council we can hit that 3% target,” said Merritt.
The guidelines also cover the County’s Capital Program, with a targeted 1% increase to the tax levy to fund capital requirements, and water and wastewater rate targets.
The County’s guiding principle when it comes to water and wastewater is a full cost recovery of all operating and capital costs, with overall net costs recovered 50% from fixed revenues and 50% from variable revenues. Leachate costs are allocated based on relative loading at the treatment plant and recovered through the same 50/50 structure.
Overall rates can be impacted based on annual increases to the underlying costs of running County facilities. Inflation-based cost increases will likely be absorbed by residents, however the 50/50 fixed-variable revenue sourcing is designed to prevent significant rate spikes.
