Each week the Municipality will be publishing a 2021 budget article to help inform residents about the process and why it's important. Subscribe to our Newsfeed to get the articles in your email.

 Process and Timeline

 

The municipality is at the beginning stages of reviewing the draft 2021 budget. Part of the process in 2021 is a revised schedule to allow for greater input from the public and aim to have the final budget developed and approved by the end of December 2020.

The Municipality will be engaging with the community through weekly educational pieces designed to help residents understand how their tax dollars are being spent, the legislative requirements, as well as the budget decision making process.

Below you will find a summary of the budget approval process and timeline. Residents are encouraged to participate in the 2021 budget process by watching upcoming meetings live on our website and by participating in the Budget Survey coming out the week of October 19, 2020.

Schedule

Time

Purpose

Weekly budget spotlights issued by the Municipality

Weekly: September 21, 2020 to approval of budget

On a weekly basis the Municipality will issue informational and background pieces that highlight key components of the 2021 budget, the process, spending, legislative requirements and more!

Tuesday, September 29, 2020

6 p.m.

The Treasurer will present the first draft of the 2021 budget at a special Committee of the Whole meeting.  The Finance and Policy Advisory Committee will also be reviewing the draft budget at this stage.

Tuesday, October 13

9 am to 2 pm

Senior Staff will make presentations to the Committee of the Whole on their draft 2021 operating and capital budgets.

Tuesday October 15, 2020

9 am to 4 pm

Senior Staff will complete their presentations to the Committee of the Whole.  Committee of the Whole will provide direction and identify projects or areas that they would like more public feedback on.

Public Engagement

Week of October 19 to week of November 9, 2020

A public survey will be circulated through the Municipal website and Facebook page requesting input on aspects of the 2021 draft budget. 

Tuesday, November 24, 2020

6 p.m.

The Treasurer to present results of the survey and finalize the 2021 budget with the Committee of the Whole

Tuesday, December 8, 2020

6 p.m.

Council to approve the 2021 budget

 Balancing the Budget

 

Each year Council debates and discusses the budget during a series of meetings in order to balance the budget and determine what they feel is an acceptable level of taxation and amount for user fees.  Municipalities can’t have budgets that don’t balance as set out in the Municipal Act, so all revenues and expenses must be equal. The first DRAFT of the budget was presented to Council at the October 6th meeting and is currently not balanced so Council and Staff have a significant amount of work to do. 

There are many competing demands for your tax dollars and user fees. Council needs to determine the services and programs residents require, along with the demands for repair and replacement of aging infrastructure. There are many other items, some out of the control of the Municipality, that also impact the budget such as:

  • growth demands
  • the property tax assessment base
  • long term contracts
  • economic trends
  • the strategic plan
  • new programming to deliver services
  • debt levels
  • staffing needs
  • planning for future capital through reserve allocations
  • pressure from external sources and legislative changes
  • along with the day to day operating needs of the Municipality

In addition to the Municipal Act, the key legislation that impacts the annual budget are:

  • Occupational Health & Safety Act
  • Ontario Building Code
  • Fire Protection and Prevention Act
  • Ontario Planning Act
  • Development Charges Act
  • Education Act
  • Drainage Act
  • Tile Drainage Act
  • Environmental Assessment Act

 

  • Highway Traffic Act
  • Public Libraries Act
  • Employment Standards Act
  • Safe Drinking Water Act
  • Clean Water Act
  • Ontario Water Resources Act
  • Wastewater Systems Effluent Regulation (Federal)

Visit our website at www.mississippmills.ca to see the DRAFT 2021 Budget details, view upcoming livestreamed budget meetings and watch for the Budget Survey coming out the week of October 19, 2020.

Operating Budget Vs. Capital Budget

The operating budget is a plan for the day-to-day operations at the Municipality and includes such things as salaries, utilities, materials and supplies, contracts, long term financing repayments, general maintenance and repairs, etc.  These expenses are consistent from year to year and add up to millions of dollars for the Municipality.   This would be similar to your daily expenses like groceries, utilities, gas, insurance, etc. that add up over the course of the year and that you can generally estimate.

The operating budget is mostly paid for by tax dollars and user fees, which include charges for such things as recreation programs, water and sewer services, building permits, childcare and library services.  Your personal “operating” expenses would likely come from your pay cheque or some other source of money you receive annually.

The capital budget is the annual plan for the purchase and repair of the Municipality’s capital assets, such as infrastructure, lands, buildings, vehicles and equipment, and includes studies needed to support the capital budget for the year. Some examples of capital projects include parks and trail improvements, the development and renovations of community spaces, road projects and bridge and culvert work.   

The capital budget varies from year to year depending on the level of asset replacement or repair that is needed.  For you, capital assets are things like a car, a boat, a house, a cottage that you must budget for to repair or replace when needed. To fund the capital budget, the Municipality looks at the availability of funding from multiple sources including grants, development charges, reserves, fundraising, long term financing, taxation and other user fees.  You would likely use your pay cheque, possibly a loan or mortgage, your savings or some other source of money to fund your assets and repairs however you’d have to consider all options before proceeding, just like the Municipality.

Special Budget Meeting Highlights

This week Committee of the Whole held two special meetings to review the draft 2021 budget. During these meetings Members of Council heard from department heads on their proposed 2021 capital and operational budgets. Members then posed questions to staff to gain further background information on their draft 2021 budget requests.

The Treasurer provided updates on the budget process, changes already made and the current budget shortfall. This year the budget process is spread over a few months to allow Council Members the opportunity to fully review the budget and to encourage public engagement and education.

Following the second special meeting on Thursday, Council Members directed staff to look into identifying priorities and budget items that can either be removed or phased in over a number of years. In addition, information will also be provided by staff that gives more rationale for budget increases, identified new items and budget implications of the Strategic Plan and results of the Service Delivery Review report.  These reports and recommendations will be brought forward to Committee of Whole at the next special budget meeting scheduled for November 24, 2020.

In addition to updated information from staff the municipality is seeking input from the community. A 2021 budget survey will be published next week. The results from the survey will help to identify priority areas for residents and how they would like to see user fees and tax dollars spent. The results from the public survey will be presented to Committee of the Whole for consideration at the November 24th special budget meeting.

The steps in the 2021 budget include:

  1. Staff put together the draft 2021 budget (completed in summer 2020)
  2. Weekly budget information/spotlight pieces published on a weekly basis (commenced September 2020)
  3. Staff present the draft version of the budget to Committee of the Whole (completed September 29, 2020)
  4. Department Heads present their detailed draft department budgets at special budget meetings (Completed October 13 and 15, 2020)
  5. Public engagement and survey launched (week of October 19)
  6. Additional meeting of draft 2021 budget presented to Committee of the Whole. This will include results from public survey and staff recommendations (November 24, 2020)
  7. Staff to make any additional changes to budget based on recommendations from the November 24th meeting (completed in November/early December)
  8. Final 2021 budget presented to Committee of the Whole (December 8, 2020)
  9. Final 2021 budget approved by Council (targeted for December 15, 2020)

Budget Survey Results

The results are in! Click below to see the results of the 2021 Budget Survey.

Budget Survey Results

Revenues

The Municipality has revenues or income from a variety of sources that it uses to pay for all of its expenses. It also tries to put money into a reserve fund or savings account to pay for things down the road.  The Municipality’s annual expenses are millions of dollars with the largest revenue sources coming from taxes and user fees. 

Taxes are billed to residents annually and are calculated based on the assessed value of their property provided by Municipal Property Assessment Corporation (MPAC) and then by applying a specific tax rate to the assessment.  The tax rate that is used depends on what tax class your property is in. 

User Fees are intended to cover the cost of providing a specific service.  The largest user fees in Mississippi Mills are for water and sewer services, waste management, daycare, recreation and building services.

There are some other revenue sources that the Municipality has available such as Federal and Provincial grants, grants from the County of Lanark, development charges to assist with growth related expenses, interest on overdue taxes and water accounts, interest on investments and cash in the bank,  and fees for other items like marriage licenses and other permits.

The Municipality tries to earn revenues to pay for all of its expenses, but Municipalities often see expenses increasing higher than inflation or expenses beyond their control.  In addition, revenues fluctuate each year and grants have been on the decline. This means that Council often has to increase taxes and user fees to meet their obligations.

Long -Term Financial Planning/Multi-Year Budgeting

 

You may have planned out your finances for the next several years and considered all of the assets you own, like your house and car, and what money you need to keep these assets in good repair or replace them when needed.  You’ve likely also thought of your monthly expenses like groceries, gas, utility bills, etc. and have taken the time to plan out for the next few years what your expenses are between your asset needs and your monthly needs. You might even be setting money aside for some additional expenses in case the unexpected happens.

After you’ve figured out your expenses, you’ve had to consider how you will pay for it all, whether it’s from your pay cheque, your savings, a loan or some other means.  You may have had to shift things around or cancel an expense entirely to ensure you will have the money in place to pay for it all.  When you’re done, you’ll have a long- term financial plan or multi-year budget that you can follow for several years. 

Long-term financial planning or multi-year budgeting follows the same general principles for a Municipality, although the number and value of its assets is considerably higher and the annual operating and capital needs are significant.

Like the example above, the Municipality conducts an exercise to determine its’ expense needs, both operating and capital for a period of at least 5 years.  Many studies and plans like the asset management plan, the strategic plan, the transportation master plan, the water and sewer rate study, the development charges study, etc. contribute to the determination of the expense needs of the Municipality into the future.

Also, like the above example, the Municipality must determine and plan how it will pay for all of the expenses.  The Municipality considers all known funding sources like grants, user fees, reserves, etc. and from there establishes the levels of taxation that will be required to support the plan.  Once the plan is approved by Council, it will require monitoring and updating as circumstances at the Municipal level are constantly changing and the unexpected often occurs.

Once the long-term financial plan or multi-year budget is established and approved by Council, the contents are used to prepare the annual budget.  For example, if the plan is for 5 years, all revenues and all expenses would be broken out by year and labeled as such- year 1, year 2, etc.   Budget preparation and deliberations become easier because Council has already considered the contents through the long-term financial planning process. Again as an example,  If the Municipality is in year 2 of the long-term financial plan, Staff would refer to the long- term financial plan document and pull out all of the planned expenses and revenues for year 2 and use that information to draft the budget that year. Council will still have to confirm the details of the budget to ensure no changes are needed based on new or different priorities, changes in legislation, etc.

Long term financial planning also benefits you because you will  have visibility on what the Municipality is planning in terms of capital work for the next few years and what impacts the long-term plan will have on your taxes or other user fees so that you in turn can use this information for your own financial planning purposes.

Reserves

The holidays represent a good way to demonstrate why it is important to have savings or reserves.  During this festive time, we can over-extend our pocketbook and we are left with some hefty year-end debt to usher us into the New Year. Unless, of course, you saved an appropriate amount of money in anticipation of your annual holiday shopping.

The Municipality has several different reserves or “savings”, each one with a very specific purpose, so that we can afford things we need, or the community wants.  This biggest expense the Municipality needs to “save” for in reserves is asset replacement and repair which is typically a very large expense.

You likely would not spend money you didn’t have or didn’t know where it was coming from. In municipal government relying on cash we do not have or are unsure if we would receive it would not be considered a "sustainable source of funding". You cannot plan your financial future around a possibility.  In the same way, the Municipality cannot depend on unreliable sources of funding – like a one-time grant or overstate revenues to lower the tax rate because it's unstable, unpredictable and unsustainable.

“Saving” for the future through reserves provides a predictable, stable and reliable source of money when the Municipality needs it whether it be for an asset repair or an emergency and is intended to keep taxes and other user fees stable.

Long-Term Financing (Debt)

Similar to how you would consider a loan or debt if you didn’t have the cash to pay for a new home or vehicle, the Municipality also has to make decisions as to how to pay for asset replacement if the cash is not readily available and it can’t wait until it is.

It's important to keep in mind that the Municipality’s cost for asset replacements can be in the range of hundreds of thousands of dollars to millions of dollars and the Municipality often does not have the money saved in reserves when the work is needed. Sometimes there is very little choice whether to incur debt if an asset has reached critical failure or if an emergency occurs.

The Municipality has historically used debt to pay for assets with a longer lifespan such as water and sewer infrastructure, bridges, buildings and larger vehicles or pieces of equipment like fire trucks, plow trucks, graders and backhoes.

Debt means that increases to tax rates and user fees to pay for these asset replacements are lower than they would be if the costs were paid upfront. For example, if the Municipality replaced at Plow truck at $300,000 and chose to pay for it upfront the increase in taxation would be roughly 2.76%. If the Plow truck were long term financed over 10 years, the annual debt repayments would still cause an increase in taxation, but it would be significantly lower at roughly 0.32%. This smaller tax increase of 0.32% is generally considered to be more manageable for residents than the larger tax increase of 2.76%. Remember that the taxation increase in this example is only considering one budget item. Each year there are many projects to be done and assets requiring replacement. Council must balance all the project and asset needs with the appropriate level of debt, user fees and taxes.

Council annually reviews the overall debt levels of the Municipality and discusses whether it is appropriate to proceed with an asset replacement funded by debt. At the same time Council considers the risks of putting off the replacement such as higher future costs, higher maintenance costs, increased breakdowns, interest rate increases, risk of failure, etc.

Just like you decide whether a loan or debt is right for you when you need to replace or repair your valuable assets, the Municipality also makes the same decision, but on a much larger scale.

Asset Management

If you compare the Municipality to a house, it is inevitable that costs come up to maintain the home. The carpets, roof or windows need to be replaced, the furnace needs to be fixed, the list is never ending.   It is likely that the homeowner has some idea as to when this work may be needed and begins to plan ahead as to how to pay for the work.  At the same time, the homeowner may need a new car or wish to purchase some other item that they also need to financially plan for.  This is asset management.

Now think about how much these general maintenance and repair costs would be for the entire Municipality coupled with the replacement costs for its assets.  A major infrastructure repair or an asset replacement could cost millions of dollars and without appropriate financial planning could have a dramatic impact to debt, taxes or user fees. 

The Municipality owns and is responsible for the replacement and maintenance of many assets. A list of all the assets can be seen at the end of this article.

The goal through the annual budget process is to set monies aside into reserves like a savings account for asset management.  The purpose of this reserve or savings account is to ensure that the Municipality has the money up front to repair and replace capital assets such as infrastructure and equipment when needed without raising taxes, user fees or incurring new debt. No new debt means no additional interest costs.

​The Municipality is working on updating its’ existing Asset Management Plan which will require further discussions with Council on what work needs to be done to assets in the future and how the Municipality will pay for this work.   

 Current Municipal Assets

  • 2 Libraries
  • 2 Fire Stations
  • 2 Arenas with ice surfaces and upper halls
  • 1 Curling Rink
  • 1 Child Care Centre  
  • 15 Bridges
  • 11 Large culverts
  • 97 km of surface treated roads
  • 96 km of paved roads
  • 186 km of gravel roads
  • 1 splash pad
  • 2 skateboard parks
  • 19 parks, 10 with amenities
  • 144 acres of parkland/green space
  • 3 public works garages
  • 1 Municipal Office
  • The Almonte Old Town Hall
  • The Almonte Old Registry office
  • 12 Fire Vehicles

 

  • 31 Public Works vehicles/ equipment
  • 10 Recreation vehicles/ equipment
  • 2 Building Department Vehicles
  • 2 Beautification Vehicles
  • Streetlights
  • 36 km of sidewalks and curbs
  • Signage
  • Other Equipment
  • 36.5 km of watermains
  • 34 km of sanitary sewers
  • 1 Wastewater treatment plant
  • 1 Water tower
  • 8 sewage pumping stations
  • 5 wells
  • SCADA equipment
  • 3 water system vehicles
  • Catchbasins, storm sewers, manholes, water meters, instrumentation and controls