Tax hike OK’d, $19M coming from reserves
Council unanimously votes to take what it calls a first step in a long-term financial fix
City council members are calling tax increases this year the first step in a long-term plan to replace now non-existent energy division profits and avoid major single-year rate increases in the future.
The average residential property tax bill will rise by about 3.45 per cent when higher assessment values are factored in, or $87.58 this year.
Millrates approved unanimously by council on Monday night would see an additional $2.7 million from tax revenue, with council members citing their dedication to a major budget review.
Council approved last year a plan by administrators to make up $23 million in previous payments from gas and power sales with tax hikes, cost containment and program cuts — with savings filling the gap.
“We could leave this for the next generation,” said Mayor Ted Clugston. “But this is our home, we’re raising our kids here and I think that we should right the ship.”
The total tax requirement of the city is $70.7 million, about four per cent more than in 2016 — half the increase marked to replace a former dividend.
The city will also use $19 million in reserve cash this year to fill the gap, then $16 million in 2018 as the gap closes, according to the recently approved twoyear budget.
To make up the difference in one year, said chief administrative officer Merete Heggelund, would require a tax increase of 30 per cent.
“The goal is to take baby steps year to year, cut costs, adjust service levels, and avoid that rate shock,” she said. Council members also question Heggelund on what a ‘no’ vote would mean.
“We would have to find the money somewhere and we’re running out of places to find money,” she said.
The entire process is planned to take 10 years and could involve more than $70 million in reserves used to stagger in tax increases.
Coun. Celina Symmonds said previous councils lacked the foresight to remove a reliance from energy revenue from the budget sooner, but the current council had “courage.”
“If we didn’t do it, years from now we’d regret it,” said Coun. Celina Symmonds. “I have immense respect for this council.”
Coun. Julie Friesen said the plan is in place but council should realize that increases and cuts will affect Hatters, but so too would not fixing the gap.
“If you look at the adjustments that staff have made, they are significant,” said Friesen. “I’ll support it but who wants it?” Coun. Bill Cocks said the increase should have been expected for some time, and Monday’s finalization of the rates reinforces council’s dedication to bringing revenue in line with costs.
“The budget was the critical piece and (setting) millrate is the instrument to make that happen,” he told the meeting.
The median assessed residential property, a home valued at $266,400 this year, will see a total increase of $87.58.
Of that, $65.21 relates to the municipal portion, $21.78 for the education amount (set by the province) and 59 cents in an increase to the Cypress View Foundation special levy.
In non-residential class (commercial and industrial property), the total assessment rose by 1.8 per cent, leading to a corresponding increase of 3.95 per cent to the millrate.
Those owners will see an additional $1,062 charged on each $1 million on value.
Rates for the smaller multi-family and farmland property classes will rise by 5.94 and 5.97 per cent, respectively.
Tax bills will be mailed in May. Taxes are due on June 30.