Council last week approved a 2.25 per cent tax increase as recommended by administration, which still falls short of the 2.8 per cent inflation rate calculated by the Bank of Canada.
“On a $350,000 residential assessment, the annual increase is approximately $64.75 more than the tax amount for that same assessment value last year, at the 2.25 per cent increase,” Chris Albert, director of corporate services, told the Round Up.
Meanwhile, a non-residential property such as a business that is also valued at $350,000 would see an increase of about $95.20 per year on the tax bill, he added.
Council carried the 2019 tax rate bylaw on April 23 during a special meeting that had been set to resolve the issue after being unable to reach a consensus the week before at the regular April 15 meeting.
Chief administrative officer Linda Nelson informed council that a series of amending motions during the previous week’s regular meeting had essentially left the original motion in limbo.
“We are left in a situation where we could have two motions approved,” said Nelson.
The first reading of the tax rate bylaw with administration’s recommended 2.25 per cent increase had been carried on April 15, she said.
“The call was made for second reading, but prior to having a vote on second reading of the bylaw as it was presented, we had a series of amending motions,” she elaborated.
One was to amend the tax rate bylaw to a 1.25 per cent increase, which was defeated, followed by another motion to amend the increase to 1.75 per cent, which was also defeated, she said.
“There was then an amending motion to approve the rate at two per cent, which was carried.”
But the process ended up stalling on third reading, which at the time required unanimous consent that was not reached.
However, there had not been a vote on the 2.25 per cent increase, said Nelson, adding that a discussion with Municipal Affairs officials resulted in a recommendation that the previously approved second reading for the two per cent increase be rescinded. Furthermore, the administrator added, “that there be a vote on the originating motion at 2.25 per cent.”
If approved, that motion would then proceed to third reading. If defeated, council could choose to bring back an alternate motion for another rate, she said.
“Our mistake, and our apologies, administratively, is we should have had a vote on the 2.25 per cent, and then called for votes for alternate percentages,” she said, asking council to rescind the previous week’s motion to change the recommended tax increase to two per cent from 2.25 per cent.
As a point of order, she added defeated motions could not be brought back, meaning council could no longer consider a 1.25 or 1.75 per cent increase.
Coun. Cheri Funke moved to rescind the motion for the bylaw’s second reading as recommended, which carried.
With the bylaw’s first reading still in effect, Funke proceeded to also move second reading for the 2.25 per cent increase, opening the floor for discussion, starting with Albert offering additional insight.
The director of corporate services defended administration’s recommendation, which remained to increase taxes by 2.25 per cent. The difference between a two per cent increase and a 2.25 per cent increase on a $350,000 residential property represented about 62 cents per month, or a little more than $7 a year, he said.
“No increase is ever irrelevant. But it is fairly minor, versus the impact on our budget lines,” he said, adding the 0.25 per cent difference amounts to about $8,400 for the municipality.
The town’s head of finance also expressed confidence in the municipality’s department managers, who had been directed to draft the most realistic forecasts possible and to be able to justify their numbers.
“I believe they did that. I believe we have a very comprehensive, realistic budget.”
Albert also reminded council about the numerous weekend workshops that were previously held in the months leading up to the budget’s approval, and added administration had already endeavoured to keep the tax rate increase lower than inflation, largely by bringing down contributions to restricted surplus accounts.
Coun. Cheri Funke said the budgeting process is the time for administration to be directed to sharpen their pencils, not when the time has come to set the mill rate.
“That is council’s job to set the mill rate,” said Funke, adding administration “did exactly what council directed them to do — they did one better,” she said, referring to staff coming back with the 2.25 per cent increase after originally being told to aim to keep in line with inflation at 2.8 per cent.
“If we so choose to deviate from their recommendation, which we can, we also have to own where the cuts come from,” she said, cautioning her colleagues that such a decision would likely mean reducing service levels.
“What I’ve heard from the public that I speak to and that come to me, is they’re finally at a place, with levels of service, that they like — they’re actually giving positive comments,” she said, adding that leaves few options other than cutting back grants.
“Right now, we give out $96,000 to outside third-party organizations. That’s not including the agreements that we have in place with the Aquaplex and the museum,” she said, adding those unallocated funds could be used to lower the tax increase.
Reluctant to make any cuts to funding for third-party organizations, which Funke said she would nevertheless support if that was how council decided to proceed, she stood by her original position to accept administration’s recommendation.
Coun. Richard Warnock, who due to attending a conference was not present during the April 15 meeting, said everyone on council would no doubt ideally prefer to see a one or zero per cent increase to the tax rate.
“(But) I do believe we met the goal we asked for,” said Warnock.
“And that was to be below the rate of inflation.”
Speaking in favour of the motion, the councillor said, “I believe administration did exactly what we asked and we are doing our best for our residents.”
Coun. Paul Isaac, who remained opposed to the proposed 2.25 per cent increase, said administration had done a remarkable job getting the budget to a position where the proposed tax increase was lower than inflation, but added the economy continues to struggle and that every little bit helps residents and businesses.
Coun. Rob Wolfe, who had recommended the 1.75 per cent increase on April 15, said that in light of the additional information decided he could support the 2.25 per cent increase.
Mayor Terry Leslie said the first point on his platform in running for public office was to hold the line on taxes.
“We know as we go through a new budgeting process that there is an overestimation of expenses and an underestimation of revenues,” said Leslie.
A half percentage point on the tax increase represents only a little more than $16,000 on the town’s multi-million-dollar budget, he said, expressing confidence in administration’s ability to find efficiencies.
Furthermore, throughout the span of his past five years on council, the mayor said the municipality’s reserves have grown to more than $6 million from about $2 million in anticipation of coming capital projects.
Additionally, in speaking against the motion, he argued that while a municipal government cannot by law run a deficit budget, every effort should be made to keep year-end surpluses as small as possible.
Funke’s motion for second reading of the bylaw to approve the 2.25 per cent tax increase carried with Isaac and Leslie opposed. The third reading, also moved by Funke, carried.
