Quesnel council approved the City’s Five-Year Financial Plan and Tax Rates Bylaw at a May 5 electronic council meeting. This year’s budget sees a 5.5-per-cent increase in municipal taxes. (Photo courtesy of City of Quesnel)

Quesnel council approves 5.5-per-cent tax increase

This year’s increase includes inflation, increased RCMP and bylaw services and a new snow tax

Municipal taxes in Quesnel are increasing 5.5 per cent this year.

Quesnel council approved the 2020 Tax Rates Bylaw and the 2020-2024 Five-Year Financial Plan at its May 5 electronic council meeting, setting the municipal tax rate for this year and putting into place budget decisions that had been previously approved by council, such as a move to set the light industry mill rate to be the same as the commercial business mill rate over the next three years in an attempt to attract potential future economic development.

“I think it’s important for us all to be reminded that the work we do on budget is sharp-pencil work every year; there’s not a lot of fluff, if any, in our budget from year to year,” said Mayor Bob Simpson, who is chair of the City’s Financial Sustainability and Audit Committee (FSAC). “As a council, we actually try to project the out years, so we don’t just do the single year; we actually try to put a tax framework together, so this year’s budget is in that context of a four-year tax framework that we’ve done a lot of work around.”

The average residence in Quesnel, valued at $221,283, will see an increase of $70.84 in the municipal tax portion of their property tax invoice, or $32.01 per $100,000 of assessed value. A commercial business will see an increase of $116.04 per $100,000 of assessment, which Kari Bolton, the City’s director of corporate and financial services, says will be offset significantly by the reduction in the School Tax, provided by the Province this year.

Simpson noted the overall tax increase of 5.5 per cent could have been a lot higher had the City not done proactive work to create a Tax Stabilization Reserve to help mitigate the loss of $400,000 in industrial taxes from the loss of Tolko, starting this year.

“That’s a direct hit, about a two-and-a-half-ish-per-cent tax increase if we wanted to cover it all in one year; we’re able to mitigate that because we had a tax stabilization account, and we’re using that to moderate that hit over the next three years — but we’ll be drawing that account down,” he said.

A portion of the 5.5 tax increase is for adding more RCMP and bylaw officers to deal with some of the public safety issues in the community, a request the public has expressed to council in the last two budget cycles, noted Simpson.

Part of the increase is also due to the creation this year of a new separate tax rate to create a Snow Reserve, which will create a buffer for high snow years so the City can maintain its snow removal standards. The intent of the buffer is to create a reserve that would have up to $300,000 in it. Once the reserve reaches that amount, no additional taxation for the snow reserve would be collected until the reserve has been used.

“We’re still not where we need to be on the annual budget yet for snow,” said Simpson. “We were 30 per cent over this year, we were over the year before, but we have added a taxation function to put in a snow reserve to try and buffer the vagaries of whatever happens with snow over the years.”

A large portion of the tax increase is also to cover inflationary costs, noted Simpson.

“If you look at the actual increase itself, it’s very strategic, very deliberate and very necessary,” he said. “As a council, we’ve taken the position if you don’t cover inflation, you’re going backwards.”

If the City does accrue some savings over the course of this year, the current Tax Stabilization Reserve will be repurposed into a Tax and Community Stabilization Reserve, explained Simpson. This reserve fund would strategically target some assistance into the community for the not-for-profits and others and as much as possible provide some business assistance, such as enhanced marketing or through bulk purchasing of personal protective equipment.

Bolton told council the COVID-19 crisis is affecting the City in many ways, but staff is looking at ways to offset all the loss in income with reducing some of the City’s spending, and there will be opportunities to revisit the budget and adjust it if needed as the situation evolves.

Bolton says the City is facing lower revenue from the airport, transit, casino, and investment income, while experiencing higher costs due to additional cleaning/janitorial/maintenance costs.

“City staff has made recommendations about some of the projects we should delay,” she said. “City staff will be continually reviewing the budget as the year progresses, and if further adjustments are required, we will be returning to the FSAC with options.”

Property taxes for all classes are due Sept. 30 this year, a delay that was approved at the April 21 council meeting. The City will be borrowing from its capital reserves to operating expenses in order to do this, as allowed by the Province during the COVID-19 crisis.

Coun. Ron Paull voted against the financial plan and the budget bylaw. He felt by pausing $400,000 to $500,000 in capital expenditures, the City could cut the tax increase roughly in half.

“While I appreciate a need for tax increases to offset decisions for things like increased bylaw and RCMP and for the loss of our industrial tax base and reduced revenues due to COVID, my opinion is we are not going far enough to reduce this year’s tax increase of 5.5 per cent,” he said. “In past elections … I campaigned on sorting the fluff from the stuff, and by that, I mean non-essential discretionary spending from essential non-discretionary spending, and I think if there was ever a time to sort the fluff from the stuff, this is the time. And I’m not suggesting for a minute that we hit the reset button, only the pause button.”

Coun. Mitch Vik noted the budget discussion this year was certainly difficult, but there are two factors he feels could mitigate some of his fear — one is that there is nothing stopping the City from “pivoting and adjusting” if further adjustments are required as the year goes on, and he also feels the Tax and Community Stabilization Reserve can serve a “very valuable” purpose.

Coun. Tony Goulet liked the idea that the City will be able to make adjustments if needed as the year goes on.

“I think we need to be cautious and move forward in a way and remain stable,” he said. “I see some things maybe that we can tie onto if we have the ability to, as Coun. Vik said, pivot and adjust. A key factor in here for me is what is the provincial government and federal government doing to help municipalities, and a way to tie into that if there’s anything they are doing or anything that’s going to come down the pipeline. I think that municipalities at some point are going to see something develop as we move forward.”

READ MORE: COVID-19: City of Quesnel defers property tax deadline to Sept. 30



editor@quesnelobserver.com

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