SMITHS FALLS — Council reviewed a revised draft of the Smiths Falls budget for 2026 at its Jan. 26 committee of the whole meeting, with major provincial funding significantly reducing pressure on the town’s tax levy while department heads raised concerns about aging infrastructure and emergency services equipment.
Treasurer Paul Dauber highlighted a $13.5 million provincial grant toward the town’s water tower and trunk water main project, calling the funding a major financial breakthrough.
“This is huge,” Dauber told council. “It removes the need for a debenture and avoids about $800,000 a year in debt servicing costs, which would have translated into roughly a three point eight per cent levy increase on its own.”
The funding allowed staff to significantly rework the draft budget and move closer to council’s preferred tax levy target of about four per cent.
Fire service equipment concerns
During budget deliberations, fire Chief Rick Chesebrough warned council about the condition and future of the town’s tanker truck, which has been deferred for replacement multiple times.
Chesebrough said the tanker is more than 35 years old and is critical for firefighting in areas with limited hydrant coverage and low water pressure.
He told council the vehicle is essential for maintaining service levels, particularly in older parts of town and along corridors where hydrant infrastructure is incomplete. The chief cautioned that continued delays increase operational risk and could result in higher replacement costs in the future.
Water system limitations
Public Works and Utilities Director Paul McMunn provided additional context on water distribution challenges affecting fire protection.
McMunn said many older water mains are undersized or affected by internal buildup, restricting flow and pressure even where hydrants are present. While annual flushing helps, he said it does not fully resolve limitations caused by aging infrastructure.
He noted that the trunk water main project will improve capacity in some areas of town, but will not eliminate all pressure issues system wide.
Tourism funding concerns
Councillors also raised concerns about tourism and economic development funding after staff outlined reductions made to meet the four per cent levy target.
Coun. Jennifer Miller questioned whether the proposed tourism budget left enough capacity for the work council expects. She said she was uncomfortable with how tight the tourism operating budget had become and asked staff to clarify what funding would remain available for initiatives and events.
Staff responded that the reduction was limited to a specific special events line and that core staffing and other tourism-related budgets remained intact. They said several event-related costs had been shifted to Community Services as part of a restructuring, rather than removed entirely.
Staff agreed to return with a clearer breakdown of tourism and economic development spending so council could better understand how funds are allocated between staffing, operations and programming.
Smiths Falls budget adjustments and remaining pressures
Dauber said the first draft budget presented in December would have resulted in an 8.3 per cent tax increase before council directed staff to identify savings and additional revenue.
Following that direction, staff reduced the tax levy requirement by just under $785,000 and lowered reliance on the tax-based reserve by about $1.7 million. The revised capital budget was also reduced from about $29 million to roughly $22 million, with some projects deferred to later years.
Dauber said one of the largest operating adjustments was moving the town’s daycare program, delivered under a funding agreement with Lanark County, from a tax levy-subsidized program to a revenue neutral model in 2026. The change removes about $150,000 in pressure from the levy while maintaining existing service levels.
However, staff said meeting the four per cent target left about $135,000 in items outside the draft budget, including a proposed locate permit technician position estimated at $85,000 and a $50,000 contribution to the Railway Museum.
Smiths Falls council indicated a preference to preserve the proposed $50,000 contribution for roof repairs at the Railway Museum, even if it requires deferring a planned gateway feature at Lombard and Abbott streets.
Public input and household impact
Staff also presented results from the town’s annual budget survey, which received 117 responses. About 60 per cent of respondents supported either increases tied to inflation or higher taxes paired with enhanced service levels. Sidewalks, fire services, water, police, and parks and outdoor spaces ranked as the top service priorities.
Staff estimated the draft budget would result in an increase of about $136 per year in property taxes for the average household. Water and wastewater charges would add about $64 per year for the average residential customer.
Council is expected to continue budget deliberations before final approval soon.
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