Your residential property taxes are going up by…

By David F. Rooney

It’s quasi-official: residential property taxes are going up by five per cent this year. Business taxes are also going up but only by 2.5 per cent.

City Council, gathered as a Committee of the Whole (CoW)  decided to adopt a financial plan devised by Finance Director Graham Inglis during a special meeting Thursday afternoon. While this decision is not binding it will become official once they vote on it during a formal Council meeting. Members of the public have 30 days to comment on the financial plan.It will be posted at once Council approves it on March 9.

Council has scrutinized various aspects of the proposed budget during past CoW meetings. In all, the final draft of the financial plan had eliminated $143,275 in costs that had been included in the first draft. And they went over it all again on Thursday looking for ways to pare it down. They especially hoped to find things to hack back from the snow-removal budget, which has ballooned to about $900,000 over the last four years. However, they could not find any fat to cut away that would not, ultimately, result in residents paying for part of their snow removal out of their own pockets. (To be specific, Council was told it could save $222,000 by ordering city crews not to remove the two-to-three-foot windrows that block people’s driveways after plowing. They considered but ultimately rejected  that option.) However, they did manage to cut an additional $50,000 by deciding not to pursue a boundary expansion study this year.

The draft financial plan that Councillors examined Thursday originally called for 2.5 per cent increase for all classes of property, but they wanted to spare the major industry class, meaning Downie Timber, a tax increase. As Councillor Phil Welock put it: “Everyone in town needs to understand the value of having that sawmill. It creates employment, and the money its employees spend finds its way into stores and small businesses in the city.” Heavy industry across the province is being hit with rates of taxation and while the City cannot influence that it can exercise “the only power we have… to reduce their taxes.” The property tax rate for heavy industry is going down by 19.79 per cent.

Property taxes for light industry and seasonal businesses are increasing by 2.5 per cent. Overall, this means a tax increase of 1.65 per cent.

“We did manage to keep the overall increase down to 1.65 per cent,”  said Councillor Steve Bender, chairman of the City’s Finance Committee. “I don’t know how you do it any other way. We don’t have large numbers of people living in the hinterland to support the tax base and it’s illegal to run a deficit.”

Councillors did try to limit the residential property tax increase to 2.5 per cent but they could not make the numbers work without clobbering heavy industry and/or running deficit this year and they did not want to do that.

“This scenario appears to be palatable,” said Councillor Peter Frew, who chaired the meeting.

So unless they find a way to cut more spending — something they haven’t be able to do without impairing the City’s ability to deliver services and plan for the future — this is what the property tax situation will look like. They also voted to increase the annual rates for garbage collection to $184, water to $315 and sewer to $108. That’s about 2.2 per cent and is in line with the average increase in the cost of living.

This five-year financial plan forecasts an increase of 1.88 per cent in spending to $14.072,848 from $13,813,664 with modest increases year over year until 2014 when they peak at almost $14.7 million.

Total debt continues to be a serious concern for Council. The financial plan envisions a municipal debt of $17.8 million this year, $21.7 million in 2011, $29.4 million in 2012, $31.5 million in 2013 and $33.7 million in 2014.

“The size of our debt is scaring people,” said Councillor Tony Scarcella, who voted against the financial plan.

Welock said he, too, is “alarmed at our projected debt but our No. 1 priority has been infrastructure improvement.” Replacing infrastructure in the future is only going to be more costly.

Mayor David Raven, too, is very concerned about the debt but he said Revelstoke has “to have a long-term vision.”

Bender, however, noted that while the debt looks scary, it really should not frighten people.

“Most of that debt is recoverable,” he said, pointing to service charges and hook-up fees for the big ticket items like sewer expansion on CPR Hill and in Arrow Heights.

The City has also received major federal and provincial grants that will underpin much of the infrastructure renewal that will occur in months ahead, Bender said.