1. Why collect property taxes?
Scugog provides a number of services and programs to the residents and takes care of roads, facilities and equipment valued at almost $500 million in Township. Property taxes are the major source of revenues to pay for the services/ programs and taking care of our assets.
2. Do property taxes cover all the costs of running Scugog?
Property taxes are the most significant revenue source for the township; however, we also receive grants from the Province of Ontario, and charge user fees to help offset the costs of programs and services to the taxpayer to the extent possible, in addition to other miscellaneous funding sources including development charges.
3. What are User Fees?
Many services offered to residents are available equally to all and these would be included as part of your property taxes. Examples include Fire protection, snow plowing of roads, grass cutting in parks etc. User fees are the rates charged for the delivery of products or services to residents that are optional and offered on a fee for service basis. Examples include rental of meeting rooms, purchase of a permit, enrollment in a day camp program etc.
4. Do user fees cover the costs of the services?
No this is not always possible. Although these fees are reviewed annually and compared against other areas and similar municipalities, staff balance the recovering of charges and ensuring that programs and services are offered to the public in an affordable and responsible manner.
5. Why does the budget increase each year?
Each year municipalities face several pressures that increase the costs of services including inflation, added services due to growth and changes in community expectations or legislation.
6. Can taxes stay at zero?
The cost to provide services often increase at a rate that exceeds other revenues. The Township has very few options to address these increases. They can be offset by increased taxes, increases in other revenues, cutting costs or reducing programs. All these options are considered when the annual budget is prepared. To maintain existing service levels and programs is not possible to go without increases.
7. What options are available to keep taxes low?
Municipalities struggle to manage when their prime source of funding is the property tax base. The ability for municipalities to raise additional revenues is limited due to legislative or legal constraints and are left with reducing services if they want to keep taxes low in the short term. New revenue sources need to be made available through legislation to take the pressure off the tax base.
8. It is not a good time to increase taxes so why is Scugog?
Staff and Council recognize it is a difficult time for everyone. The demand for services and cost pressures continues each year, and the Township is also facing the increased costs and loss of revenues resulting for COVID.
9. What is the wisdom behind raising taxes to prop up reserves while residents are struggling to make ends meet?
The majority of the increase in 2021 is related to the infrastructure requirements identified in asset management studies. The funding for reserves allows the municipality to invest funds when needed to help maintain our assets at the lowest cost. Recent studies have indicated the asset management deficit within Scugog is $190 million for roads alone, of which over $100 million is now or near-term needs. This reinforces the need to continue to invest in assets. The deficit cannot be eliminated all at once, and a planned approach of gradually increasing contributions to the capital reserves is the most feasible solution.
10. Why put money into roads?
The right work done at the right time allows you to extend the life of a road at the best possible price. You can stretch the life of a road from 25 to 50 years at much less than the cost of building the road twice, simply by doing the right maintenance activity at the right time. The same philosophy holds for facilities and equipment needed to support service delivery. Without the facilities to deliver programs, or the equipment to maintain the roads and facilities, service levels will decrease.
11. Why do you not cut back on staff to save money?
Staff are critical to service delivery. Without staff who would drive the snowplows, graders, cut the grass, clean the parks, inspect the properties, fight the fires, review the plans, and many other functions that go on every day. Cutting staff would reduce the ability to provide the services residents need, expect and deserve.
12. I have always heard that “Growth pays for Growth”. Is this not true?
Development charges have typically been used to offset a large percentage of the capital cost associated with growth however they do not cover all costs. In addition, assets added to the Township’s inventory must be maintained to ensure they continue to meet the needs of users in the future. This maintenance comes with a cost as the increase in usage will add to the wear and tear on all municipal assets.
13. Would the additional property taxes collected on growth not cover the other costs associated with having these new tax payers?
Although the increase in taxes collected from new growth helps offset some of the costs, it cannot cover everything. The demand for services by the new residents (who will have service level expectation from their former municipality) along with the added cost to maintain new infrastructure assets assumed from developers can be substantial. Some areas that will be impacted by population growth and service expectations include cleaning of parks or public facilities due to increased foot traffic, an increased need for by-law enforcement, an increase in the number of roads to be cleared of snow during the winter, and the need to allow for more participants in recreation programs offered.
14. Businesses are suffering so why make it worse by increasing taxes?
We recognize several businesses are impacted by the pandemic, however the demand for municipal services and legislative requirements remains. The public expects continued service delivery and costs are increasing, revenues are decreasing, and pressures continue to grow. The Township works with community committees such as the BIA, the Chamber, and the Economic Advisory Committee to help find ways to support business. The Region’s economic development department also provides a key role and resource for assisting businesses within Scugog. To further assist businesses for 2021 the Province reduced the Business Education tax rate. This will result in lower taxes for commercial and industrial property tax payers in 2021.
15. Why can’t the Township do more to help offset the impact of COVID?
The local municipality’s property tax is only a small component of overall taxes paid by Scugog taxpayers. This does not allow them the flexibility to offer financial support to local businesses or individuals. Other levels of government are better positioned to support business, and families financially.
16. With so many events still being cancelled due to COVID, why did you budget based on a normal year?
The Township chose to budget for a normal year with the expectation that operations would return to normal once the vaccines were distributed. We wanted to have the funds to reopen our facilities and run all the normal programing once the emergency ended. If we had reduced the budget to reflect COVID closures and restrictions, we would not be able to reopen when the Province lifts the restrictions.
17. How do you engage the public and keep them informed of the budget process and outcomes?
Township staff are always interested in what the public has to say and encourages them to review the postings on the website www.scugog.ca. The budget presentation was posted on You Tube should you wish to view it followed by Q&A.