The Hampstead 2014 Budget

2014-03-02

Majority to see Tax Decrease
Seventh Year in a Row of Local Tax Increases under Inflation

Keeping local tax increases under control, year after year, is an achievement of which I am very proud and I thank my colleagues on council and our very hard working employees for their major contributions. However, what we have accomplished since getting our town back in 2006 is even more important. While we inherited a sadly neglected infrastructure when Hampstead was demerged, we have since repaired much of it, including most of the roads, very many sidewalk sections, water mains and sewers. We have also introduced new programs and kept the Town safe, clean and a very pleasant place in which to live. Yet, at the same time, we have been very frugal with our tax dollars. Being fiscally responsible means not spending beyond our means. Over the last six years, local tax increases have been kept below inflation. The same is true this year. The average single family homeowner will see a local tax increase of 1.75%. This is below the expected inflation rate for 2014.

 

A few months ago when the new evaluation roll was released with average increases close to 20%, many of you were worried that you would have large tax increases. As explained then and several times since, we drop the tax rate to cancel valuation increases. What counts is whether your increase was above or below average for the town. For 69% of single family home owners, the increase was below average and so those residents will have a local tax increase below 1.75% and, in fact, 56% will see a local tax decrease.

 

The news this year is even better as the taxes that we must pay to the Agglomeration will be only 0.39% higher than last year. This excludes Montreal water consumption charges which are covered by Hampstead’s water tax. Overall, the tax increase for the average single family homeowner will be 0.85%.

 

Financial Highlights

  1. On target again in 2013 – In a few months the external auditor will present the official Hampstead financial report. We expect to have a modest surplus in spite of lower “Welcome Tax” revenues due to the weak real estate market. Several things contributed to the surplus. Road maintenance decreased due to our aggressive road construction program in 2012. Both long term debt and debt service have decreased. Tight management of expenses is an additional factor.

  1. The Hampstead 2014 Local Budget of $13,362,341 holds spending increases to 2.2% – Many of the town’s expenditures have increased by more than the rate of inflation. Nevertheless, we have kept the overall budget increase to 2.2%.

  1. Our accumulated surplus is expected to be approximately $1,780,000 at the end of 2013. This is above our target accumulated surplus range. We will use the excess above $1 million to cover capital expenditures and avoid taking on unnecessary new debt. The town remains in very good shape financially.

  1. Dramatic decreases in debt and debt service costs. Long term debt (net of grants) was $10.87 million at the end of 2013. This is a 21% decrease since 2009. Debt service costs have dropped by 32% since 2009. Based on the latest government statistics our debt service ratio at 5.7% is 1/3 lower than the average for similar sized towns on the island of Montreal.

 

Key Initiatives for 2014

  • Infrastructure – Our top priority is to continue water main rehabilitation. At 26% done, perhaps the best record in the province, we have come a long way in eight years but there are still too many breaks. Our street light network, sidewalks and roads will continue to be improved. Another major expense will be for heavy vehicles to replace ones that cost too much to maintain. Beautification efforts will focus on Councillors (Gayton) Park this year with a water park area replacing the wading pool, new plantations and decorative lighting at night. Also, our web site will see major improvements. In total we will spend about $2 million and get grants of about $1 million for this work.

  • Prudent financial management – We will continue to keep our controllable costs below inflation through prudent spending and cost-management strategies.

  • Core services – As always, we will continue to keep our town clean, attractive and safe.

  • Programming and community services – We will maintain high quality programs, while we explore additional opportunities for exciting and novel events. We are also planning for a very exciting 2014 centennial year.

  • And most importantly, we will continue to prioritize Open and Frequent Communication, to ensure that our residents are informed and involved in our many Town initiatives.

 

As always, if you have any comments or questions, please e-mail me at WSteinberg@Hampstead.qc.ca or call me 7 days a week until midnight at my home office (514) 483-6954.


Sincerely,


Dr. Bill Steinberg
Mayor, Town of Hampstead