North Dumfries Residents Hit with 9% Property Tax Increase

North Dumfries Residents Hit with 9% Property Tax Increase

North Dumfries residents received a very unwelcome surprise as it was revealed that the township is facing a $750,000 deficit. To combat the deficit, it was decided that residents will be faced with a property tax increase of 9% this year, which equates to an average increase of $63 per household. Initially, a 23 per cent hike for the coming year was suggested, but that figure was slashed as councillors opted to cut spending and raid reserve funds in order to address the deficit.

Where did this deficit come from? It turns out that there were several administrative shortcomings, including:

  • Inadequate reporting of the township's finances.
  • Pervasive departmental overspending.
  • A failure to collect residential and commercial fees owed to the township.
  • The continued usage of 25-year-old accounting software that runs on MS DOS ... yes, MS DOS ... that is not a typo!
It was also revealed that a quarterly report, which would have alerted councillors to the deficit sooner, had been deferred and never transpired.

Overspending

The following township departments went over their budget in 2014:

-General Administration by $51,000.

-Finance by $130,000.

-Protective Services by $17,000.

-Roads by $237,000.

-Recreation by $77,000.

-Planning by $85,000.


Failure to Collect Fees

The township is owed $220,000 in application fees that date between 2002 and 2012, for requests like severing a land lot, or starting a gravel pit or subdivision. Historically, the township often would pay the application fee (ranging between $250 to $2,000) along with any outsourced consultation costs, with the understanding that the township would collect the fee from the applicant at a later date. This is extremely troubling for residents, who learned that collecting the fees falls under the responsibility of the planning department, which only came into existence two years ago. Before then, no-one tried to collect the money!

In addition to the $220,000 that the township can expect to recover, there’s an additional $83,000 that has been lost for various reasons, including applicant deaths.

MS DOS in 2015

The township is currently using accounting software purchased in 1990 that runs on MS DOS. It doesn’t have a financial reporting capability, nor has it the ability to talk to other modules or financial systems. Council approved the purchase of new software for 2016, but has now seen an urgency and decided to buy the new system this year at a cost of $80,000.

Dipping into Reserve Funds

A 23% tax hike was initially proposed, but in order to keep the increase at 9%, councillors cut down contributions to the reserve funds for the roads and fire departments. In addition,  the town hall building at 1171 Greenfield Road will be put up for sale to avoid expensive repairs needed in the near future. The remaining deficit will be paid by money taken out of the gravel reserve fund.

Council will be given the new budget on Monday night. They are expected to approve a final budget on April 14, leaving residents rightfully angry as they are stuck with a significant property tax increase. What's more troubling is that, because the township is dipping into their reserve funds, eventually those reserve funds will need to be topped up again in the near future, which will inevitably result in more tax increases for residents.

Sources: The Record, CBC