Sundre residents will see their mill rates increase by almost two per cent this year.
During its May 2 meeting town council carried the 2016 tax bylaw, in which the residential mill rate will increase to 7.740 from 7.591, or a 1.96 per cent increase. For the average residential property owner, the increase represents roughly an additional $34 a year.
The non-residential mill rate has increased to 11.421 from 11.2, or a 1.97 per cent increase that represents for the average ratepayer a jump of about $110 a year. The vacant commercial mill rate was left unchanged at 15.
However, the decision to carry the tax bylaw was not completely cut and dried.
“I have two points,” said Mayor Terry Leslie.
“And those points are a request that council take into account the fact that when we were discussing the tax rate increase for this year, we didn't have an idea about what the Municipal Sustainability Initiative operating contributions would be,” he said, adding that funding would amount to about $33,000 for Sundre.
“I would ask you to consider diverting that to go against the proposed tax increase.”
Secondly, there was also the FortisAlberta franchise fee that council approved back in September — an increase of two per cent over the original five per cent, he said.
“When the franchise fee discussion came before us, I remember an explanation that when the franchise fee was available to council, we had decided — and previous councils had decided — that that franchise fee should go towards offsetting taxes.”
But council last fall opted instead to direct that two per cent increase towards infrastructure reserves, he said.
“We all know that infrastructure reserve is something that we have more ways to spend money than we do money available to spend on our infrastructure. But I'd ask council to consider that two per cent being held in the same way as the previous five per cent in being used to offset taxes.”
Coun. Chris Vardas said those were valid points and that he respected the mayor's perspective, “but as I've always said, I don't like falling behind the eight ball. We have a lot of issues with our infrastructure, and we need the funding for it down the road.”
“We should stick to our motions, not waver away from them.”
Council has already dedicated five per cent of the FortisAlberta franchise fee to help offset taxes, he said.
“So I strongly suggest we leave it (the tax increase) the way it is, and move forth.”
Compared to the more than three per cent tax increase on lands the Town of Sundre recently annexed from Mountain View County, 1.9 per cent is a relatively modest increase, he said.
“We're in the ballpark here, and we're doing quite well. I do not believe in flatlining the tax base, due to the fact is when you flatline today, the mill rate still goes up tomorrow, and we're going to pay for it.”
Coun. Cheri Funke said she understood where the mayor was coming from in terms of his desire to give back to taxpayers during the economic downturn by dropping to zero the anticipated 1.9 per cent tax increase.
“But I also want to remind you how much money the administration had to cut out of their budgets to make it stay at 1.9 per cent,” she said, referring to some revenue shortfalls that left staff scrambling to cut almost $1 million to balance the 2016 budget.
“Why was it never discussed that we give it back to the administration for the training and things that they need?” she asked.
“Why did you jump straight to giving it back to residents?”
The mayor agreed administration had done a “remarkable job — every department did a remarkable job. We had a tremendous amount of revenues that disappeared and the accommodating cuts that were made throughout the organization are deeply appreciated by all of us.”
That being said, taxation is the single biggest concern Leslie told council he had heard from taxpayers leading up to the last election and since.
“In the discussions that we've had through the budgeting process, the issue of having money go toward infrastructure is a valid point,” he said.
“Last year, we budgeted $861,000 to go toward infrastructure reserves and we put in over $1 million. So that particular point, I think, we took from taxpayers more money than we had budgeted for that specific item, and we put it into those reserves because of the legitimate point that we need to put money away for the future.”
But confirmation that the municipality would be eligible for further MSI grant funding changes the situation. Also, there have in the last two years been surpluses, and the mayor said that when the municipality takes more money from taxpayers than it spends in a given year, council should seriously consider giving some — or perhaps even all of it — back, he said.
“Because what we did last year, when we found we had a surplus, was we took that surplus, put some in the infrastructure reserves and we reduced the tax rate. That's why I bring up these two points, because any money that we take and put into a reserve is not in the economy anymore.”
The mayor added that any money returned to taxpayers — regardless of whether it's as little as $5 a month — in turn gets spent in local businesses, he said.
“Money that we take from taxpayers should be what we need — not more than.”
So while the previously discussed tax increase is legitimate, “the information that we received after the provincial budget of MSI funding of $33,000 wasn't anticipated, so we should give that money back to our taxpayers,” the mayor said.
Coun. Funke said that a $35 tax increase for the average home multiplied by a 1,000 people represents $35,000 that the municipality won't have if council should forgo the 2016 tax increase.
“And there's more than 1,000 people (in Sundre). We'd cost ourselves more money than we're getting in from MSI.”
Council went on to carry the 2016 tax bylaw.
“I appreciate the conversations, I appreciate the debate, and I appreciate the decision that council has made and I support it,” Leslie said.
