Monday, September 22, 2014

Fiscally Responsible Leadership

Since the final installment of 2014 Pelham Property Taxes are due next week (on September 30), I thought I would give you a recap of our 2014 Property Taxes and the results of this term of Council.

Property Tax Calculation:
You will recall that the amount of property tax you pay to the Town of Pelham, to the Region, and to the Province (for Education) is not only based on the Market Value Assessment of your property; we multiply your assessment (as assigned by the Municipal Property Assessment Corporation) by each of the tax rates and add them up for your total bill.

Despite your tax rate being set by each entity for their services, the Town collects the taxes and distributes it appropriately.

This Year and Four Years:
As I reported in April, both Pelham Town Council and Regional Council approved only slight tax increases this year. The combined property tax increase for an average property in Pelham for 2014 is 0.9% above the 2013 amount. I report this as a “out-of-pocket” value, so that translates into an approximate $36 change from last year for the average residential property owner (value of $298,000). This increase was the lowest or second lowest in Niagara Region again this year.

But, what about over a longer period of time? Let’s compare this term of Council with the last term of Council, and with inflation.

The average increase of property taxes on your combined residential property tax bill for the last four years was 1.5% (a cumulative increase of 6.0%); for the previous four years – from 2007 to 2010 – it was 1.8% (a cumulative increase of 7.3%).

Lower than Inflation:
How do we measure whether that is “good” or not? Another important comparator would be inflation. Inflation for the last four-year period was 7.4% or an average of 1.8% per year.

I hope you too are pleased that our residential tax increases have been 1.4% below inflation for the last four years. Please see the chart for more information.

Debt Reduction & Capital Improvements:
Some folks have asked me about the Town’s long-term debt and capital improvements.

You will be pleased to know that since the end of 2006 to the end of 2013 (the most up-to-date, audited data), we reduced our long-term debt by 20% – from $6.3M to $5.0M. Over the same period, our “debt to revenue ratio” – a private sector measure – reduced by 30% (from 53% for 2006 to 33% for 2013). (Source: Audited Financial Statements, Town Pelham, 2006-2013.)

Further, I anticipate that we can significantly reduce our debt levels over the next few months when we complete the sale of property for public benefit. You will recall that the Allen Group agreed to purchase 7.7 acres of Town-owned lands in the East Fonthill area for $375,000 per acre to facilitate the construction of a Medical Centre (5-10 Family Doctors and Allied Professionals) and a Retirement Home (135 apartment-style units with 12 town-house units).

Finally, at the same time that we reduced our term debt and increased property taxes at a rate lower than inflation, we dramatically improved the Town’s infrastructure. From better roads and more sidewalks and trails, to new playgrounds and new and improved parks, to renewed Downtowns, and thanks to our success in achieving significant investments by other levels of government, our four-year capital budget totaled $32.5M – an average of $8.1M per year.

Pelham Council and I continue to ensure that we only minimally impact you and other property tax-payers while we continue to improve our infrastructure and increase the quality of services in the Town.