Revelstoke council is proposing a seven per cent tax increase on home owners and a four per cent increase on businesses as part of its 2017 budget.
Council made the decision at their fourth budget meeting on Tuesday, Mar. 21. It still needs to be affirmed at the next official council meeting, which takes place next Tuesday, Mar. 28.
Afterwards, the budget will go out to public for feedback.
“We’re going to get hammered on it, it goes without saying,” said councillor Trevor English.
Council’s discussion on taxes started by looking at the five per cent tax increase on all property classes that was put forward by staff. At that rate, the average Revelstoke home, valued at $271,591, would have seen their city taxes go up by $88, including increases in water, sewer and garbage rates.
Coun. Scott Duke, who attended his first budget meeting after missing the first three, led the discussion to raise residential taxes at a higher rate than business taxes, and he made the motion to set the tax split that was eventually approved, but only after coun. Connie Brothers suggested it.
Duke started by noting council’s goal since they were voted in was to reduce the tax burden on businesses.
“If I were to shift a little bit, I would continue to do what we initially decided to do all along which is to raise residential a little bit faster than we raised business so that we can level that playing field,” he said. “I still feel the business taxes in this community are high and I feel the residential taxes – although people will always say their taxes are high – are not as high.”
At a seven per cent increase, the average homeowner’s tax bill will go up by $112, to $2,098 this year from $1,986 last year. $85 of that increase is from the rise in property taxes, while the rest is from the hike in water, sewer and garbage rates.
Figures for businesses were not immediately available.
Brothers suggested the tax increase. “I’m inclined to bite the bullet a little bit more. It doesn’t make a whole lot of difference dollar wise when I’m looking at the dollars,” she said.
The justification was for the city to maintain a budgeted surplus of about $150,000 that can be put toward future infrastructure projects.
“What I’m looking for from this seat is to make a bit of an impact going forward so we can protect our community in the future,” said Duke. “We’re going to get some heat for it, but at the end of the day even it’s a $400,000 home, you’re going to put an extra $80, an extra $160 into the community this year knowing it’s going to go to infrastructure.”
Couns. Sulz and English also voted in favour of the split, while Mayor Mark McKee and coun. Aaron Orlando voted against it. Coun. Linda Nixon was not at the meeting.
“I think seven and four is too much and too big of a spread,” said McKee. “I’m of the opinion we should be asking for money that we are spending, which we aren’t. If you’re thinking of throwing money into roads, fine, but I don’t think there’s an appetite out there to go up that much.
“I don’t know it’s acceptable to the community to be going a seven per cent increase. Me personally, I think we’re stretching it go six,” he added.
Orlando said his concern was the budget didn’t do enough to address major infrastructure concerns like roadworks. “The bulk of the increase that needs to come, for example, if we want to manage our roadways properly, is in the future, so I have a hard time saying let’s go up seven per cent. I’d prefer to see six and four.”
Allan Chabot, the city’s Chief Administrative Officer, said taxes would have to go up by a minimum of three per cent just to maintain services. The extra increase was a result of hiring a new police officer and increased fire department staffing.
“We shouldn’t kid ourselves that we’re doing everything really well. We’re sort of binder twining things together and doing the best we can. There’s certain things we could improve,” he told council. “What I’m looking forward to based on development in the community is tax on new assessment either softening the blow, or allowing this organization to do more.
“That should help and I hope we can increase revenues at a faster pace than our costs increase. Our base costs are going to go up minimum three per cent a year.”
Tania McCabe, the city’s acting director of finance, noted that the costs of products the city buys, what’s known as the municipal price index, goes up faster than the general inflation rate.
Before even discussing tax rates, Brothers led a final stab at finding savings, questioning the city’s $280,000 information technology budget. She started looking at line by line, which led to a discussion on how council should manage the budget.
Brothers felt it was council’s duty to ask questions about each item. “They all add up and we owe it to our constituency to go through these things and show them we’re looking at it,” she said. “We all the trust the staff, but council has to make the difficult decisions.”
McKee and Duke said council shouldn’t be occupied by the details, but should set a budget and let staff prioritize.
“They make the decision on what’s important, not us cherry picking every little thing,” said McKee. “I’m not qualified to to say that the community centre needs to re-wired or not re-wired.”
“If we think the budget is a little bit too high in certain categories, then we can direct staff to go back and figure out where to find those savings because they’re the ones who are going to know where the best place to find them,” added Duke.
Council agreed they’ll have to do a good job selling the proposed tax hike the community.
“I think if we’re going to go that route then we need that communication to go out to the community on how that figure will affect the average home owner,” said Sulz.
Brothers said they should explain it using dollar value rather than percentage.
“A percentage to me is a scary thing but if you talk about what’s going to cost you on a $200,000, it doesn’t seem as much,” she said. “You’re talking about $70 over a year on a $200,000 home to make our community better.”
Selling the budget
The city budget, as proposed, includes $19.8 million in operating expenses and $3.1 million in capital spending. That doesn’t include water and sewer budgets.
Council still needs to give it one more vote at an official council meeting before it goes out for public comment; that will take place next Tuesday, Mar. 28. They have until May 15 to approve the budget.
The information package that will go out to the public will show how the tax increases will impact individual property owners. It also provides a break down of the property tax increase.
Some items lead to a decrease like a forecast $100,000 increase in pool revenues and $144,000 in additional revenue from new construction.
Those are more than offset by spending increases to maintain existing services, including a 4.72 increase in employment costs. The increase is also driven by hiring another RCMP officer and an emergency program coordinator/training officer for the fire department.
The document also provides a breakdown of key spending such as completing the roundabout, the Front & Wales sewer lift station, the Big Eddy water upgrades and the Thomas Brook water and sewer projects.
One thing that isn’t in the budget is major spending for road works. Instead, staff will be working on a 10 to 15 year plan that will look at how to fund the replacement and renewal of all of the city’s assets.