Renfrew – The impact of a $17 million loan to cover the cost overages for the Ma-te-Way expansion will be about $1 million a year in debt repayment, or a 10 percent levy increase if savings are not found elsewhere.

However, for 2024, staff has brought in a budget with savings found through cuts to reserves of about $2 million as well as some operating cost savings in various departments, meaning the draft levy increase is under 10 percent. In essence, the proposed 9.42 percent levy increase for 2024 is lower than the cost of the debenture for Ma-te-Way.

“Debt alone (from the Ma-te-Way expansion) is a 10 percent impact and we are able to offset that with other things that we were able to do in this budget including reducing some contributions to reserves,” CAO Robert Tremblay explained during a budget presentation last Tuesday evening.

Ratepayers in the packed council chambers heard the levy increase amounts to $134.88 per $100,000 in assessment. This is only for the municipal portion of the tax bill. The County of Renfrew has already brought in an increase of 5.47 percent which corresponds to $20.76 per $100,000 in assessed value. There is also a portion for education funding on the property tax bill.

Earlier in the evening, Mr. Tremblay noted the $35 million facility, the Ma-te-Way expansion or MyFM Centre, is an asset for the town.

“It is a major investment in the future of the town that comes with some operating pressures and this budget is seeing those impacts, but I do want to recognize the importance of that facility for the future of the town and that we have a number of recreation agreements with surrounding townships,” he said.

During the budget presentation, Acting Treasurer Charlene Jackson presented various debenture options for the $17 million debt for the Ma-te-Way expansion, with payments between $1 million and $1.6 million annually.

Councillor John McDonald questioned which debenture option was recommended by staff for the Ma-te-Way expansion, whether it be the 30, 20 or 25-year debenture. He also asked looking at the 9.42 levy increase what percentage of that is for Ma-te-Way.

“What percentage impact with that final tax levy?” he asked.

Mr. Tremblay said the budget is calculating a 30-year amortized debenture, “so an impact of $1.074 million.”

He said once all the agreements are made with tenants, things can change, but with the budget they are planning on around $1 million.

“$100,000 is approximately one percent on the levy, so the impact of the debt alone is about 10 percent. What the acting treasurer has presented you is a levy increase of $941,000 so what that means is we have found the money elsewhere to offset the debt,” he said.

While there will be new revenues, there will also be staffing costs and increased utilities, Mr. Tremblay added.

The new building should be more cost effective, he said. As well, as the building is operational there will be a better idea of revenue and users, as well as finalizing leases with tenants.

“We will get a better idea of operating costs when we are in the building fully,” he said.

Mr. Tremblay noted the town has a repayment limit of $3.2 million and this will cost $1 million so there is a lot of room for future projects.

“We are still in a good place from a debt perspective.”

Looking at aging infrastructure, there are pressures in Renfrew including for other projects like water and sewer projects and financing these through debt is how most municipalities function, including large cities, he said. 

The CAO said they are hoping more growth will happen in the town, which would also ease pressures on the levy.

Councillor Andrew Dick also questioned how much is going to the Ma-te-Way debenture out of the levy of about 10 percent.

“Is five percent going to the Ma-te-Way debenture? Can you break it down exactly what is going to Ma-te-Way?” he asked.

Mr. Tremblay reiterated the debt payment on Ma-te-Way alone is about one million and the difference between last year’s levy and this year’s levy is $941,000.

“So essentially we found savings elsewhere,” he said. “The levy increase is less than the debt impact.”

“We were able to ‘eat’ the Ma-te-Way debt,” he added.

Coun. Dick said his fear is the money would not be there for the next 30 years.

“We lower the tax levy this year because we found the money somewhere else,” he said. “But then in year two we find the money again and in year three we don’t find the money and then all of the sudden our taxes, the tax levy goes way up.”

“So, it is better to take the hit now and rip the band aid off and say, ‘yeah, we got to pay for Ma-te-Way now’?” he asked.

The CAO said this has been a discussion at the staff level, but he stressed reserves will still be healthy at $11 million at the end of 2024 despite what is coming in and going out.

“We have limited capital in all other areas,” he said, noting equipment and fleet investments are not being made this year.

With the aging infrastructure there will be other pressures.

“The biggest impact is we have cut in half essentially the contributions to reserve,” he said.

Instead of over $3 million going to reserves, there will be about $1 million.

Once the 10-year capital plan is presented, it will show the impact with the reserves. In the future council will need to look at this because the reserves pay for roadwork, he said.

“One shave and pave in the Town of Renfrew is $700,000,” he said.

Councillor Clint McWhirter said the current cuts are in reserves, so he asked for more cuts in operations to lower the levy. He suggested bringing the levy down to an eight percent increase.

Ms. Jackson pointed out department heads have already cut back for 2024.

“Through operating alone we cut back 10 percent and then cut back on the reserve transfers, so… I don’t want to say where we started, but it was high. 27.5 percent is where we started and we got it down to 9.42 percent,” she said.

Individual committees can look again, but there has already been a lot of number crunching done, she said.

Councillor Jason Legris said it is also possible to cut too much and there is a snowball effect.

“You are not buying a tandem this year and then three years down the road we need two or three of these trucks,” he said.

“I pay taxes in the Town of Renfrew so I want the levy as low as possible too but I just want to make sure we are not cutting too much now,” he said.

Various committees will look at individual budgets and the 2024 budget will be presented at a February 20 meeting.