Tax variations raise a million-dollar question

As published in The Erin Advocate

Owning a house that is assessed at $1,000,000 can be quite a burden when it comes to paying property taxes. Councillor Matt Sammut raised the issue at the January 20 budget meeting, in a heated discussion about the impact of tax increases.

“Who is paying the brunt of it?” he asked. “If your home is valued at $400,000, and you get a 5% increase, that’s a couple hundred bucks, I can live with it. It’s the homes that are valued at 7 – 800, a million dollars in our community, that are getting killed, and we’ll continue to kill that group.

“You can just do a simple comparison right next door. You have a million dollar house in Caledon, you have a million dollar house here. Here, you’re paying about $12,000 in taxes; over there you’re paying about $6,000.”

Mayor Al Alls expressed shock at that statement, but after two hours of working on Erin’s budget, he said he would not argue about Caledon. Sammut suggested that he read the Toronto Star on a regular basis. Alls said, “I don’t need your lecture, Councillor Sammut, and I call you out of order.” At that point, he adjourned the meeting.

Overall taxes are known to be lower in Caledon, but a difference of $6,000 seemed like a major exaggeration. So I looked up the tax rates for Erin and Caledon, and multiplied them by a $1 million assessment.

It turns out that the tax bill for 2015 was actually $2,349 higher in Erin. That’s not small change, but it’s a long way from $6,000. Sammut acknowledged the discrepancy later.

“Yes, I exaggerated the variance in taxes as my goal is to motivate our Council that we must discuss fiscal sustainability and fiscal fairness in our community,” he said.

He has a long list of concerns, including high infrastructure costs, the undervaluing of rural homes in provincial assessments, tax credits for farmers and the high percentage of county taxes. Some communities have advantages under regional government, have more money to provide services, and have better internet, lower hydro rates and lower water rates.

The Town of Erin has little or no control over these issues, however, so they cannot be solved in the Town budget. Erin could slash its taxes by 80%, and residents here would still pay more than in Caledon.

Looking at the chart of what is paid in various communities, it is clear that Erin’s Town taxes are relatively low. Caledon residents pay 30% more (and get more services). But like others in Wellington County, Erin’s total taxes are much higher than in Caledon and Halton Hills.

This has nothing to do with efficiency. It has everything to do with population density and the massive commercial and industrial tax revenues generated in Brampton, Mississauga, Oakville and Burlington, which reduce the burden on residential taxpayers in Peel and Halton.

In addition, Wellington County Treasurer Ken DeHart says the chart illustrates a shift in property taxes from urban to rural communities.

Should rural Erin help pay for urban sewers?

As published in The Erin Advocate

When building a sewer system, the Servicing and Settlement Master Plan study emphasized the need to hook up all urban residents, to divide the cost into smaller portions.

Severe restrictions on how much treated waste will be allowed in the river, however, are limiting the total urban population to 6,000 people. Unless the Town can have the rules relaxed, “serviced” growth will total only 400 new homes.

Mayor Al Alls is looking for ways to raise that number, though he makes it clear that these are ideas that may or not be approved by Town Council or the Ontario government.

One strategy is to provide wastewater service to only the older homes and allow newer homes with good soil conditions to carry on indefinitely on septic systems. This would create three tiers of housing: rural (private wells and septics), urban partial (public water and private septics) and urban fully serviced (public water and wastewater).

Say for example that half the homes in the two villages were exempted from wastewater service. That would be about 800 fewer existing families sharing the cost, but presumably this would be offset by developers being allowed to build 800 additional homes.

Normally, the cost of a wastewater system – construction and on-going use – is paid only by the people who are actually hooked up, just like the water system.

But what if everyone in the town, including rural residents, helped to pay off that debt – maybe over 30 years? That’s what Alls suggested in a recent interview – again, just his own opinion.

“The way I see it, it’s a user pay system, but the initial construction and base of the system will be a Town-paid system,” said Alls. Several residents at last week’s public meeting objected to that idea, but the mayor did not respond in detail, saying only, “If it’s not affordable, we won’t build it.”

He points out that septic tank owners will benefit from having a local plant where tank pump-outs (septage) can be dumped. But even if there were a cost saving, it would be minor compared to a share of a huge loan payment.

The Town at large has already paid some $650,000 for the SSMP process and is looking at up to $200,000 more per year for the Environmental Assessment. Is that a precedent that can be extended to construction of a sewage treatment plant?

There are, of course, indirect benefits to a sewer system, if it provides desirable population growth and economic development. And it’s true that most people already pay for lots of government and school services that they don’t personally use.

That might not be enough to convince rural residents though, who are already paying for their own waste systems. What about new residents on serviced lots – will they have their full share of the sewer system cost included in the price of their homes, creating a huge cash flow for the Town? And what if we allow some new partially serviced subdivisions, where new residents would be paying for high-tech septic systems? Should all of these people also help pay for the wastewater system through their taxes?

There may be a scenario where extra contributions from rural residents, developers and new residents could help solve our wastewater problem, but the possibilities should be researched in the near future. The plan needs to be fair, in the public interest and legally defensible.

Town Council must ensure that a full analysis of financial options is included with the discussion of technology options in the next phase of the Environmental Assessment.

Community grant requests invited

As published in The Erin Advocate

As usual, the provision of grant money from the Town of Erin to community groups will get some intense scrutiny. This is quite proper, since it is public money, but the amount is very small compared to the Town’s overall spending.

The current plan is to give out $32,950, the same as last year, with the final amount and allocations to be set during upcoming budget debates.

A report last October from Finance Director Sharon Marshall, based on the work of a Grant Committee, recommended that almost half the money ($16,000) go to East Wellington Community Services (EWCS) to support the Seniors Program at Centre 2000.

Other local groups seeking funding for 2016 from the remaining $16,950 must apply by January 31. That amount represents about one tenth of one per cent (0.128%) of Town spending, budgeted in 2015 at $13.2 million.

It is only natural that people focus attention on smaller amounts. Most councillors and residents do not have the expertise to critique expenditures of hundreds of thousands of dollars on fire department equipment or bridge construction projects.

I don’t know when the law changed, but it was normal until the mid-1900s for major spending bylaws to be put to a public vote in Ontario municipalities. I wonder how that would work today? Unfortunately, we are down to a state where public input has become symbolic at best. Most people have no expectation of influencing public affairs.

But getting back to local grants, Council has adopted a policy that clarifies how applications are considered. A Grant Committee is appointed each year, made up of the Mayor, CAO, Economic Development Officer, Treasurer and one other Councillor. They review the applications and make recommendations to the full Council.

The maximum grant (except for EWCS) is $3,000. Each application should support the priorities of Council, and will be evaluated by the following criteria:

• Benefits the majority of Town residents

• Facilitates self-sufficiency and/or sustainability of the community organization

• Promotes volunteerism, participation and leadership development

• Promotes affordable, accessible, inclusive and diverse programs or services

• Fosters a healthy, safe and active community

• Provides new or complimentary programs or services

• Supports efficient and effective use of municipal resources and facilities.

The policy prohibits community grants to faith organizations, political groups, hospitals and other medical services, schools and government agencies.

A link to the policy and the application form is available on the home page of the Town website, erin.ca. Applicants will need to provide information on their plan, volunteer involvement, the organization’s goals, other funding sources, previous Town grants and current executive.

Applications for grants will be accepted from any individual, group, or organization operating on a not-for-profit basis, having a formal organizational structure, and providing local services, products, programs or initiatives.

Grants can be used for core operating funding, one-off events, special programming or small capital purchases.

The Town already provides some benefit to local groups by charging reduced fees for use of Town facilities. Council is planning to review its policy on waiving fees, but fees will not be waived as part of the community grants process.

Helping Syrian refugees as they arrive in Greece

As published in The Erin Advocate

Barbara Harrison wanted to do more than just help Syrian refugees as they arrive in Canada. After seeing some of these victims of war while travelling in Greece last fall, she looked for a way to make a practical and personal contribution to the relief effort.

“It makes you feel like there’s nothing you can do – it’s such a big problem,” she said. “But there is so much we can do.”

The Erin resident has now travelled to the Greek island of Lesvos, where many Syrians land after a perilous sea voyage, to work as a volunteer with local agencies. She will be there with her friend Denise Bates from Tennessee until January 17.

“I’m sure it will be a profound experience,” she said.

Harrison is part of the Transition Erin group and her trip was highlighted at their recent fundraising event, An Evening of Dickens. About $10,000 was raised, with most going towards a sponsorship in Mono. But more than $1,000 will go to Harrison’s project, for medical supplies, food, clothing, blankets and direct aid to “boots on the ground” agencies in Greece.

“We want to support the Greek economy and spend the money there,” said Harrison. She and Bates have raised about $2,000 through online crowdsourcing (Act4Lesvos2016 on generosity.com). They are paying their own travel, accommodation and other expenses.

The situation on Lesvos can be chaotic, as officials struggle to provide food and shelter in makeshift refugee camps. The island is the shortest crossing point from Turkey on the trip to northern Europe, and refugees are expected to stay only a few months.

Local aid groups are operating without central coordination and without strong backing from international agencies. The island has only 86,000 residents and they have been overwhelmed in 2015 – sometimes with more than 1,000 refugees per day.

“While I've worked with refugees for 20 years, I personally have never seen such a human crisis as intense as this one,” said Bates, on their fundraising site. “We are a global community. We should have each other's backs.”

Harrison expects to be doing manual work – washing clothes, moving supplies in warehouses, delivering meals, looking after children and providing transportation. She does not speak Greek, Arabic or Farsi, but does not expect to have any trouble finding English speakers to help with translation.

Apart from the assistance they can deliver, the travellers have a professional interest in the refugee crisis. The experience will serve as research for an academic paper on grassroots assistance for refugees.

Bates’ background is in Public Health, and Harrison taught previously at the University of Guelph. She has been involved in promoting the idea of learning through service and community engagement, and has offered a course on the Canadian Refugee Sponsorship Program.

After Harrison returns, Transition Erin will host an evening for her to share stories about the trip. It will be held on Monday, January 25, from 7 pm to 9 pm, in the lower hall at All Saints Church, 81 Main Street in Erin. It will also be an opportunity for local groups to explore ways of working together to offer more support to Syrian refugees.

Harrison is hopeful that the Erin community will be able to organize enough support to sponsor a refugee family.