Gray Highlands expects a surplus for 2024, but a tight budget for 2025

There is a sense of deja vu in the Gray Highlands council chamber about the upcoming deliberations on the 2025 municipal budget.

Although the formal budget process for Gray Highlands council has not yet begun, council members are well aware that they face difficult budget numbers and difficult decisions for the second year in a row.

Setting up the Budget 2024 was no easy task for the city council and 2025 will be no different.

At the Nov. 6 meeting, council discussed a pair of financial reports from Anna McCarthy, the council’s chief financial officer and treasurer, that illustrated some intense budget days ahead.

McCarthy released a report on the state of the municipality’s finances in 2024 after three quarters and she also reported to the council on plans to formally close new long-term debt through Infrastructure Ontario for a number of capital projects completed in 2024.

The total annual repayment for the new long-term debt is just over $486,000 per year. The impact of the tax levy will be just over $258,000 in 2025 (some previous long-term debt payments ended in 2024, reducing the amount of new taxes the municipality must collect for the new payments). Projects completed with debt financing included: road and bridge work, the reconstruction of the Connecting Link on Highway 10 in Flesherton and three fire engines.

During discussions on the two reports, Mayor Paul McQueen noted the implications for the 2025 budget. The mayor pointed out that long-term debt payments for the 2024 projects would add 1.67 percent to the tax levy, that the significant increase in OPP municipal costs would add 2.4 percent to the tax levy and that a loss of provincial infrastructure funding would lead to a 2.4 percent increase. Add another 0.5 percent to the tax levy.

“We are looking at a four percent increase for these four items,” he said.

There was also good news in the figures.

Count. Tom Allwood noted that the third quarter financial update showed a positive trend. According to McCarthy’s report, Gray Highlands remained under budget until the end of September.

“We are showing a surplus,” Allwood said. “It’s still early in the year.”

The 2024 budget was no easy task for the council. Setting the budget involved multiple meetings that often lasted hours as the City Council looked for savings and reductions to push back on a local tax increase that started in the double digits. The Council ultimately settled on a local tax increase of 7.62 percent, which totaled 6.2 percent when combined with the increases for Gray County and the various school boards.

The draft budget for 2025 will be presented to the council in a committee of the whole meeting in December.