The budget, which is currently being viewed by councillors in preparation for its April 7 adoption, reports that on a $200,000 home, the increase would translate into an additional $15.56 a year. Annual district taxes on a home assessed at $200,000 would jump to approximately $639 from approximately $624.

According to the budget, overall, Muskoka’s net operating costs increased by approximately three per cent this year, to approximately $77.5 million from just over $75 million. After revenues, financing and reserve contributions, the district’s tax levy sits at approximately $53.8 million, or 4.3 per cent higher than 2007. Assessment growth reduced the tax increase to just under 2.5 per cent, the modest rate council was aiming for, said Stephen Cairns, Muskoka’s commissioner of finance and corporate services.

“The direction from council was to keep the increase within the rate of inflation,” said Cairns last Wednesday. “Overall, we’ve exceeded that mandate.”

According to the commissioner, finance staff was still able to maintain a generous contribution to its capital fund for roads while meeting this budgetary goal. The budget indicates that almost $14 million will be poured into roads infrastructure this year.

Other favourable factors keeping the budget in line is a minor one per cent increase in policing costs, Cairns reported. Policing costs typically make up a significant portion of Muskoka’s operating budget. This year, however, policing cost rose only marginally, to $9.4 million from $9.3 million.

“That (small increase) was a significant milestone that helped us achieve our goal,” Cairns said.

The provincial “upload” of Ontario Disability Support Program and Ontario Drug Plan payments also helped reduce costs this year. The budget shows that Muskoka was able to redirect approximately $685,000 from its previous coverage of these plans to reserves and/or other expenses.

On the flip side, however, several areas of the budget did see significant increases.

According to the budget, Muskoka’s personnel costs increased by more than $1.3 million this year, due to wage adjustments and benefit increases. Muskoka’s increased need for roads maintenance, snow removal and other services, meanwhile, added $2 million to the books.

Increased transfers to reserve funds also attributed to another $1.4 million in costs.

While on the whole the budget increase is minor, area taxpayers will still feel the pinch this year thanks to the district’s rate-supported budget for water and sewer.

The rate-supported budget was adopted separately by council Feb. 25, showing a 19 per cent increase in water rates and a more than 13 per cent increase in sewer rates. For the average homeowner using both municipal services, the figures translate into an overall monthly increase of $21.80, or an additional $261 a year, for a home assessed at $200,000.

District finance staff is currently investigating ways to reduce these costs by paying down Muskoka’s debt for water and sewer infrastructure, the driving factor behind the rate changes.

Options include increasing local improvement charges and/or development charges, and the creation of a new non-urban levy for water and sewer.

Cairns is expected to report back to district council on staff’s water and sewer debt reduction plan before June 30.

Muskoka district councillors, meanwhile, are scheduled to discuss the 2008 tax-supported operating and capital budgets March 31.