The Township of Madawaska Valley will soon present its proposed 2018 budget. Many taxpayers do not understand how their tax dollars are being spent. If you have questions, this budget “primer” will help you begin to understand the municipal budget process.
To start with, Madawaska Valley taxpayers are lucky to have access to a massive amount of information on the township website such as:
- OVERVIEW: Budget Summary (which gives a snapshot of the budget). This is available under Township Hall/Documents on the main township website. Click HERE to view the 2016 Budget Summary.
- DETAILS: Budget as approved by our elected representatives (which shows detailed projections for the coming year vs. the actuals/budgets for the last year) Click HERE to view the 2016 Detailed Budget (66 pages long).
- LISTEN IN: There is also a website where we can listen to our councillors discussing these figures at the annual “budget workshops”. This is a great service for people who can’t attend the meetings in person. To use this, you may have to open an account and you need to search for madawaska-valley and then look for the name and date of the meeting. Click HERE to go to the website.
At time of writing, Madawaska Valley has not provided the final figures for the 2017 financial year. So the examples in this article are taken from the figures for 2016 – the only available complete financial year. So, the question is:
What do we look for in a proposed budget?
It depends on what we’re interested in.
First, select the areas of the budget that are of interest. The biggest expenses in our municipality are roads, but any look at expenses means checking out wages and benefits, hydro, lawyer fees, etc. in every department of the municipality. Wages will always go up thanks to inflation. I’m interested in roads, protection, parks & recreation, general administration.
It’s useful overall to compare last year to the proposed budget and look for any big changes in expense or income from the previous year. Note areas where no money is being spent on capital projects or where nothing is being put aside into reserves. Spending in one area but not in another demonstrates Council’s priorities – no matter what individual councillors may say they are interested in. In other words:
Follow the money.
The average taxpayer is concerned about any obvious increase in taxes. Therefore, every council tries to keep tax increases to a minimum. A good rule of thumb is 2 percent of the assessed value. In my experience, a budget with NO increase in taxes is bad for the township. Taxes should reflect inflation at least. Without even looking at a budget, this generally means an increase of 1.5 to 3 percent.
The 2016 budget shows that in Madawaska Valley, roads are the biggest area of spending. Policing also takes up a lot of tax dollars. Spending on roads is determined locally, but policing costs are established at a different level. The cost of surfacing our roads varies depending on the material used. Our township has a 20-year plan which is updated every five years. Roads are supposed to be maintained within each five-year period of that 20-year plan. Operations Committee meetings show which roads your elected representatives have chosen to do, and in what order. When things happen out of sequence, you may want to ask why. Click HERE to see the last five-year Roads Needs Study.
- Overall Expenses
- Overall Revenues
Once you get the hang of the overall budget and the different departments, be brave. You can check the details that interest you in the detailed budget document.
The overview (Budget Summary) on the Township website lists the major sources of revenue such as taxation and grants. Individual items in each department are listed in the detailed budget. The municipality’s revenue from taxation is based on a percentage levied against the assessed value of the property in the township. The assessment rolls for 2018 as submitted by MPAC reveal the assessed value of lands for these geographic areas:
- Roll #24 – former Radcliffe Twp. $291,912,896.00.
- Roll #26 – former Twp. Sherwood, Jones & Burns, including Wilno $355,711,395.00.
- Roll #28 – Village of Barry’s Bay $100,721,775.00.
The total for all three is $748,346,066.00
Seasonal residents with rural or waterfront properties will note that the bulk of the municipality’s tax revenues comes from the geographic Sherwood, Jones & Burns Townships, with geographic Radcliffe Township contributing a lesser amount. The remaining taxation revenue comes primarily from the year-round residents and the businesses.
The bottom line
Hopefully this article has illustrated what taxpayers should look for in the proposed 2018 budget when it arrives. Every taxpayer can attend the budget meetings and participate by asking questions during the Public Question period. Detailed budget documents are uploaded to the website in advance so you can also email questions to members of council before the meeting. If you want to see how the budget is performing during the year, look for the six-month Year-To-Date reports attached to the Finance & Administration Committee meeting agenda – usually in June.
Why is it so important for taxpayers to examine the budgets?
Members of our municipal council have obligations of accountability and transparency. To see how well they perform, taxpayers can (and should) examine how they demonstrate their fiscal responsibility – especially in an election year.
About the author: John Hildebrandt, a fifth generation Valley resident, started Madawaska Doors with his father – a secondary manufacturing industry adding value to the traditional timber trade and marketing Valley products internationally. He served as an elected municipal official for 13 years through amalgamation, first as Reeve and then as Mayor of the newly-formed Madawaska Valley. He is particularly proud of his work in beginning the physician recruitment program with five neighbouring municipalities (still functioning today) as well as his role in Zurakowski Park. Although retired, he is actively involved in community issues such as hydro costs and access to medical services.