Quesnel council is proposing an almost-seven-per-cent tax increase for 2020, which reflects increased funding for RCMP officers and bylaw enforcement staff and a new snow levy to build up a reserve to deal with winter weather.
Mayor Bob Simpson, who is also chair of City’s Financial Sustainability and Audit Committee (FSAC), pointed out that when this budget cycle started, the City was already $400,000 in the hole because of the loss of the Tolko mill’s tax assessment, and the City had already agreed to boost the RCMP up to 23 full-time equivalents but had not yet really booked the tax implications of that.
The initial draft budget showed a tax increase of around 10 to 11 per cent in the first year, then an 8.5-per-cent increase, and it wasn’t until about four years out that the increase was down to the more typical four-per-cent range, he explained.
They brought the increase down to just below five per cent but after revisiting the results of this year’s budget survey, which showed that taxpayers wanted the City to add more RCMP, FSAC brought two new funded RCMP positions and funded bylaw positions into the 2020 budget as well, said Simpson.
“Now we’re up to 6.7, but I think the 6.7 is the realistic budget — it’s where we have to be,” he said. “Throughout the process, FSAC was challenged every time, and the directors were challenged every time where can we find cost savings in the system, and we don’t believe we’re running anything that doesn’t need to be funded and doesn’t need to be part of service delivery.”
At this point in the process, the average tax lift on an average residence is about $65, or approximately $30 per $100,000 of assessment, before any tax shifting. Council later agreed to shift taxes away from industry, which would add roughly $3 per $100,000 in each of the next three years (including 2020) for residential taxpayers.
The $64.83 per average residence includes a $15 increase for funding two additional RCMP officers, a $9 increase for additional bylaw officers, a $9 increase for a new snow reserve, a $2 increase for clearing driveways of ice, a $2 increase for the creation of a carbon reserve, a $20 increase for inflation, and $7.83 to cover other increases, according to a report from Kari Bolton, the City’s director of corporate and financial services.
The new snow levy will allow the City to put funds into a snow reserve. Bolton says the City was more than $300,000 above the snow budget in both 2018 and 2019, even with increasing the budgets. The intent of the snow levy would be that any year where there is less than $300,000 sitting in the snow reserve at year-end, a snow levy of up to one per cent a year (approximately $165,000) would be charged to top up the reserve.
Funds from the City’s tax stabilization reserve are being used to offset some of the effect of the Tolko mill closure, while one-time supplementals have been funded with the tax stabilization reserve, ongoing supplementals have been funded with taxation, and the increase to the equipment reserves in 2020 is funded with the City’s excess transit surplus, explained Bolton.
Coun. Mitch Vik, who is also an FSAC member, thanked Bolton and her team for their work.
“We made your team work hard for this document,” he said. “A couple fundamentals we always keep in mind, first of all, we want to maximize the quality of services we have in our city and get the best value possible, while respecting the burden we place on taxpayers. So with those two things in my mind, that’s how I approached this process.”
Vik was happy to see the snow reserve being built up.
“I really believe strongly in the fact we have created the snow reserve,” he said. “I think it’s insanity to think we’re going to have situations in the future where we are going to be under-budget on snow removal, and history has proven that, so I think it’s just smart business and smart operating culture to have a reserve for this.”
Vik also highlighted the attention council paid to the public wishes to enhance the RCMP and bylaw enforcement.
“I really feel we’ve respected the wishes of our community to enhance that, and I believe that is money well-spent and it will bear fruit in our community,” he said. “I certainly feel very confident we have done extreme due diligence with this budget, and I hope my fellow councillors will agree to that.”
Council approved the 2020 operating budget at its Feb. 18 meeting and also approved the addition of a one-per-cent tax levy to build a snow reserve. This new tax line would only be used when the reserve was depleted below $300,000 at the end of the prior year.
City staff will continue building the Five Year Financial Plan based on this budget.
The next steps in the budget process will be receiving the final assessments from BC Assessment, reviewing options for 2019 surplus, setting the tax rates and finalizing the Tax Rate Bylaw and the Five Year Financial Plan Bylaw. Final tax rates are expected to be set in April, and the budget bylaw and tax rates bylaw will be approved before May 15.