Shelburne Questions and Answers Resulting from the Public Meeting

Hi All - Please note we've received questions as a follow up from the public meeting and organized answers here. If comments were received that didn't fit with the questions I posted them as a comment below.

 

Q (comment) - Additional information and calculations are needed in order to fairly judge advantages and disadvantages of amalgamation.

 

A – This is very true. The information to date is based on specific assumptions for the purpose of considering whether or not amalgamation is an option worth exploring. Decisions by Council at this point do not commit the Town to anything other than to possibly look into some options further. Should the Town decide to explore this option, a great deal of analysis would be required by the Town cooperatively with any municipality considering amalgamation with the Town in order to make informed decisions.

 

Q – Would Shelburne have to become a Village within a larger municipality if amalgamation happened?

 

A – No. If a Town amalgamates with a municipality it does not automatically become a Village. For example, Liverpool isn't a Village within the Region of Queens.

 

Q – If Shelburne amalgamated and then became a Village, who says what additional services would be provided and how would the area rate taxes be set?

 

A – If the Town amalgamated with the municipality and residents and businesses wanted services that are not provided by the municipality they could:

• create and elect a Village Commission (VC) (requires Utility And Review Board approval);
  
• VC would consider which additional services residents want and how to deliver those services;
  
• VC would determine how much revenue is needed to cover the cost of the services residents want;
  
• VC would set an area rate to be charged to all residential and commercial assessment in the (former) town to pay for the service.
  
• Residents and business would pay this additional area rate on top of their municipal tax bill.
  
• 
  
  Based on 2010/11 assessment values each $100,000 of Village service cost would cost approximately $200 a year for every $150,000 in assessment.
  
  
  
  

Q- What extra services would be covered?


 

A - Services could include snowplowing, sidewalk construction, recreation and most of the services that a town can provide with the exception of economic development services separate from the municipality.

 

Q - Will a similar projected decline in municipality-wide population create the same financial dynamic in the municipality that we are facing in the Town within a few years?

 

A - Based on population projections prepared by Stantec Consulting as part of Shelburne's Integrated Sustainability Plan, it is expected that MDS will experience a population decline similar to that of the Town of Shelburne. The population of the District Municipality is forecast to decrease by 25.7% between 2006 and 2026 (7,345 to 5,845). The Town of Shelburne's population is projected to decrease by 28.9% for the same time period, decreasing from 1,875 in 2006 to 1,455 in 2026. Assuming the population decreases as forecast and municipal costs increase by 3% a year, MDS would face the same financial dynamic as the Town of Shelburne (increasing per capita municipal expenditures).

 

Q – What is the difference between the residential / commercial tax ratios in the Town versus the Municipality?

 

A - The difference between the commercial tax rate and the residential tax rate in a municipality is determined by the 'multiplier'. The 'multiplier' sets the amount by which the commercial tax rate will be higher than the residential rate.

 

In 2009/10 the multiplier in the Town of Shelburne was 1.87 – or the commercial tax rate was 1.87 times the residential rate. (Res rate $2.04 times 1.87 = $3.81 Comm rate). In 2009/10 the multiplier in the Municipality of the District of Shelburne was 1.4 – or the commercial tax rate was 1.4 times the residential rate. (Res rate $1.30 times 1.4 = $1.82 Comm rate).

 

Q – Can the Town residential to business tax ratio (the multiplier) be reviewed and a lower ratio applied to lower business taxes in Town similar to the Municipality?

 

A- Yes – Council sets the multiplier every year and can lower or raise the commercial tax rate compared to the residential rate. However, because each dollar of commercial assessment in Shelburne raises 1.87 times what each dollar of residential assessment generates, dropping the commercial multiplier will impact residential taxes. Also, while the higher multiplier in Shelburne (1.87 versus 1.4) does create higher commercial tax rates than in the MDS, the difference between the residential tax rates in the town and the MDS is even greater ($2.04 versus $1.30). An example below shows the relative impact of replacing the commercial multiplier in the Town with the MDS multiplier.

 

Existing rates and multipliers:

                                    Town        MDS

Residential rate                            $2.04        $1.30

Commerical Multiplier                    1.87 times    1.40 times

Commercial rate                            $3.81        $1.82

 

Town Commercial rate using MDS multiplier in Shelburne        $2.86

 

The Town residential tax rate is 57% higher than the residential rate in the MDS. The Town commercial tax multiplier is 34% higher than the commercial multiplier in the MDS. While the multiplier is one piece of the amount of taxes paid by businesses the far greater impact relates to the fact that Shelburne as a town has far greater responsibilities than does a rural municipality like the MDS.

 

In 2008 the average total expenditure per dwelling unit for towns was $3,450. The average total expenditures per dwelling unit for rural municipalities were less than half that of towns at $1,724. The total expenditures per dwelling unit in Shelburne was only 89% higher than in the MDS but this difference translates directly into tax rates and is the primary difference between the rates in the two municipalities. It comes down to a difference in responsibilities – Towns are responsible for more than rural municipalities and taxes are higher as a result.

 

Q – Commercial tax rates are higher than residential tax rates, effectively subsidizing the residential tax rates. Could this 'subsidizing' be reversed in part to decrease commercial taxes?

 

A- Yes but only partly and there would be an impact on residential taxes - See answer to previous question.

 

Q – How much more would residents have to pay each year to realize a commercial tax reduction within the Town?

 

A - Using the same example above: Replacing the 1.87 times multiplier in the Town with the 1.4 times multiplier in the MDS would result in the commercial tax rate in the Town dropping from $3.81 to $2.86. For every $100,000 in commercial assessment taxes would drop approximately $950 per year. To recover the lost revenue from residential taxpayers, the residential rate would increase from $2.04 to $2.33 and the taxes for a $150,000 property would increase by approximately $435 per year.

 

Q - What are the population figures when second-home-owners and summer residents are factored in? This is a wealthy segment of population, but it wasn't included in the population/census figures used by the analysts.

A - Information on second-home owners and summer residents is not readily available and would require significant effort to gather. The population figures presented to the community were based on Statistics Canada Census data which is the most accurate data available regarding permanent community residents.