City looking at upping taxes

Tuesday, February 2, 2010

Photo: Councilor Larry Evans discusses the tax rate at the Committee of the Whole Meeting on Monday. He agreed with Mayor Lantz on increasing the tax rate by 2.75 per cent, rather than by 3 per cent - Christine Rumleskie/Energeticcity.ca

By Christine Rumleskie

It's looking like the City's tax rate may increase, and you can attribute it to inflation and low estimations.

City Council plowed through budget numbers at Monday afternoon's Committee of the Whole Meeting. A tax rate (mill rate) scenario was submitted by city staff to council, with the proposed mill rate set three per cent higher for 2010.

COSTS

City Manager Dianne Hunter outlined some of the contributing factors that influenced the proposed increase. She says the city should budget around $1.7 million to operate the Enerplex for one year. That's almost $700,000 higher than the estimations made during the Enerplex referendum.

Director of Facilities and Protective Services Jim Rogers says the estimation - made almost four years ago - indicated it would take around six people to operate the facility.

Meanwhile, Hunter says additional staffing is also eating into a chunk of the 2010 budget. In January, Council approved in principle four new city staffing positions. However, Council decided on Monday to defer the Economic Development Officer position until 2011, thereby cutting $50,000 from expected spending.

RAISING TAXES

There's also the fact that council did not toy with the mill rate last year, and it remained at 4.922 per cent.

But, a part of the proposed increase is also an effort to keep up with other communities in B.C. On Monday, Hunter explained that some cities have increased the mill rate by as much as five per cent.

This year, B.C. Assessments surprised council by announcing residential assessments have gone up by an average of 4.96 per cent. In the tax scenario document submitted by city staff, a home worth $250,000 in 2009, would now be worth $262,000.

With the proposed increased mill rate of 5.0706 factored into that assessment, taxes for 2010 would come to $1,331 - an increase of $100 from 2009.

But, Mayor Bruce Lantz is sitting on the other side of the fence, and advocating a lower tax rate. He suggested bumping up the proposed mill rate by just 2.75 per cent, rather than the 3 per cent proposed by City Staff,  and also posting several different tax scenarios on the City's website. 

Administration agreed to investigate lowering the proposed tax rate, but say it is doable.

VARIANCE

It's expected that each percentage point added or subtracted from the tax rate would influence the city's revenue by roughly $185,000.

Councilor Lori Ackerman, however, suggested the city should also investigate tax ratios, and the impacts of a higher tax rate on businesses and residential properties.

But Lantz says ratios just move money around and doesn't deal with the more important issue of budget impacts.

Councilor Trevor Bolin also pointed out that every home in Fort St. John will have a different assessment, and therefore pay different taxes.

Hunter agreed.

The mill rate has not yet been set, but Council will make a decision in the upcoming months leading up to the budget finalization.