Rossland city council adopted their five year financial plan, and offered a bit of a break on property taxes in 2021.
The 2021-25 Budget and Financial Plan was given a first reading at council on April 6, followed by a public consultation, and second and third reading on April 19.
On May 3, council adopted the plan that will see an increase in residential property taxes of 1.5 per cent for 2021, down from the 2.5 per cent hike in 2020.
However, it will return to 2.5 per cent in each of the next four years.
The revenue generated from property taxes usually makes up the majority of the Rossland budget, however, pandemic inspired provincial and federal grants have accounted for 54.6 per cent of revenue for 2021, with residential property taxes providing about 27 per cent.
In the 2020 budget, almost 44 per cent came from property taxes, 28 per cent from grants and almost 12 per cent from utility fees.
“Due to COVID-19 there has been an unusual amount of grant opportunities which the city has applied for,” read the staff report. “Of the 54 per cent of grant revenue, 17 per cent ($3.38M) has been approved and 36 per cent is pending ($6.98M).
“All grant projects have been included to ensure the city has the financial capacity to implement the projects if the grants are awarded.”
The residential sector will account for 87.6 per cent of total tax revenue in 2021, down from a 10-year high of 89.1 per cent in 2020. Businesses bear almost 10 per cent of the tax burden with utility fees accounting for just 7.9 per cent this year.
The city also recognized that with the rise in housing market prices, the residential assessments have increased faster than the business assessments when the tax rate ratio had been set in advance.
“To ensure each class bears a similar increase or decrease, it is no longer the city’s policy to establish tax rate ratios in advance with tax rates being set at an amount required to achieve a desired relationship,” read the report.
The tax rates are to be set naturally by market forces as they impact the percentage increase in average taxes for each class.
“Removing the business class multiplier will also remove the tax change volatility that has occurred because of basing the tax rate on residential class assessment movement.”
According to the report, the city’s objective is to maintain the current tax rate structure, and residential and business parity by considering market effects on the different classes.