Petrolia council considers eight percent tax increase

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Petrolia CAO Manny Baron, seen here during a 2015 budget session, has resigned.

Municipal increase offset would be

by lower education and county taxes


Officials with the Town of Petrolia say they cannot hold the line on budgets any longer.

Staff is proposing an eight per cent increase in the municipal portion of the tax bill in 2015. That includes a new five per cent Capital Sustainability fee which will bring in about $200,000 to be used specifically on infrastructure.

Chief Administrative Officer Manny Baron says the increase is necessary to start spending money on the town’s aging infrastructure. While most of the focus has been on the reconstruction of Petrolia Line in the last few months, town staff has identified a host of roads which will need $14.6 million in upgrades over the next ten years.

Baron says since 1995, the town has been holding the line on taxes. For four years, taxes didn’t increase at all. But that meant money wasn’t put into reserves for future road and building maintenance. “The consumer price index for that period (rose) 23.5 percent,” says Baron in a report to council “which means the town’s budget absorbed this inflation.

Mayor John McCharles says over the past decade, councils have been passing “putting out fires” budgets without planning for the future. “The zero budget increase is absolutely the worst thing that could have happen but they (council of the day) were on a mission to keep things at zero.”

“What happened was nothing happened…they were getting behind the eight ball year after year after year after year.”

That meant “the infrastructure was let go.”

McCharles concedes he was on council during that timeframe adding “that was the direction of the day and you couldn’t get them to change their minds.”

There was also another problem – taxes left unpaid. Director of Finance Rick Charlebois told council during the budget session one of his first jobs was to clear up a huge backlog in back taxes.

Charlebois says the town collects about $4 million in taxes each year. When he arrived there was just $1 million outstanding. “When I arrived the treasurer had been gone for a year and the deputy treasurer had left a month before I got here. I suspect there was just not enough time for everything and the tax arrears slipped,” he says.

After some effort, there is now $550,000 outstanding. By the end of 2015, Charlebois says that will drop to about $400,000 which is an acceptable level according to municipal accounting practices.

Staff went over the budget with town council all Wednesday, outlining the challenges in each department, point out where cost had been slashed by five per cent and showing where fees had increased five per cent across the board.

While there were lots of questions, councilors offered little by way of solutions to lower the final budget. At one point Councilor Ross O’Hara questioned whether the councilor’s health plan – which bears a cost of $18,000 – could be reduced or eliminated to save cash.

“To take $2,000 or $3,000 out of the budget now is not going to make any headway,” McCharles replied. “We could adjust it…but if it is there and not used, it goes into a surplus and it’s money in the bank.

O’Hara also questioned the $1.7 million cost of the multi-year Backyard Project at the Oil Heritage District Community Centre.

But in the end, councilors decided not to make any cuts until they heard from the public at the April 7 council meeting, where the budget will be discussed and possibly passed.

McCharles expects there will be people who are concerned about an eight per cent municipal tax increase but he believes it is important. “If they look at what it is really costing them as far as what the dollars are…it’s not that much.” A home assessed at $200,000 – the average home in Petrolia is assessed at $173,000 – will pay $134 more a year or about $11.17 for municipal services.

McCharles adds the tax increase provides a realistic budget for staff to work with. “Before they were fantasy budgets; they were not done looking at the future….I think it shows the cost of not planning ahead.”

Councilor Mary-Pat Gleeson likes the municipality’s new 10-year plan saying it will help council complete projects which had been put off for years. “It wasn’t done in the past so we’re in a bit of a pickle,” she told councilors. “Let’s not leave those problems for people coming down the pipeline.”

Councilor Tim Brown agrees. “It’s a game of catch up and that’s where we are now.”

While McCharles believes the increase is the right thing to do, he knows it likely won’t be popular.

“Everyone grumbles about taxes but when it comes right down to the services we provide were pretty fortunate that way,” says McCharles. “We have a fairly good quality of life in Petrolia because we do have these services.

“None of us want to put those numbers up, but we’re in the same old boat – none of that money was put in reserves. Now we need a new wastewater treatment plant – we have to do these things – basically all the sudden you have to collect the money.

“And there is only one place – that’s taxpayer.”




Here are some of the highlights from Petrolia’s budget:

  • All departments cut spending by five per cent and all fees for services increased by five per cent.
  • A new non-resident fee has been added to fees at the Oil Heritage District Community Centre.
  • Costs for policing topped $1 million for the first time.
  • A three per cent wage increase for staff was built into the budget, although contract negotiations have not been completed yet. Councilors generally receive the same increase as staff.
  • A new Capital Sustainabilty Levy will collect $200,000 for roads and infrastructure
  • Another $100,000 was found in the budget for roadwork
  • Water rates go up nine percent
  • Sewage rates are up 27 per cent as the town prepares to replace the sewage treatment plant
  • A ten-year capital works plan established lays out a timeline for construction
  • 2015 The Town will provide $532,482 for the Petrolia Line project
  • 2016 Another $464,651 on Petrolia Line and $350,000 to improve Tank Street as an alternate route during construction.
  • 2017 $741,085 will be spent on Wingfield Street. Another $461,861 will start the Florence/Kerby Street reconstruction
  • 2018 Florence and Kerby will be completed at a cost of $11,860
  • 2019 sees the reconstruction of Greenfield Street at $532,615
  • 2020 – $314,142 worth of improvements to Discovery Line. Officials plan to apply a new surface treatment in 2015 to extend the life of the road.
  • 2021 First Street will be reconstructed at a cost of $936,595.
  • 2022 to 2024 includes construction on Derby, Mutual, Holland, Third, Kintal, Olive, Ernest and Kells Streets.
  • Victoria Hall will get new eavesthroughs this year at a cost of $20,000
  • From 2015 to 2020, $1.7 million will be set aside for the Backyard Project at The Centre
  • Starting in 2016 until 2024, the town will spend $1,358 million to replace its vehicles.
  • $465,000 will be spent at the arena between 2015 and 2021
  • $400,000 will be spent upgrading sportsfields and playgrounds until 2021. Kerr Park is slated for $35,000 worth of playground equipment in 2015.
  • $20,000 will be spent on a Hotel Study
  • $100,000 will be spent marketing Downtown Petrolia during the two-year construction of Petrolia Line.