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City to change how new assessment growth is handled

Standing committee on finance recommends policy shift to council

By: Victoria Paterson

  |  Posted: Wednesday, Feb 12, 2014 06:00 am

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St. Albert city council is looking to formalize how the city handles new tax revenue from assessment growth with an eye toward stabilizing future tax increases to residents.

It appears that future tax revenues from assessment growth will be split between funding new initiatives and mitigating tax increases.

Council’s standing committee on finance is recommending that council approve amendments to the budget guiding principles policy, which the committee voted on Monday night.

Staff had laid out three options and recommended a tactic that will see 75 per cent of any new assessment growth revenue used for new initiatives and 25 per cent placed in reserve.

Use of that reserve would be triggered if a net tax increase of 3.5 per cent is on the table. The funds would be used to mitigate a higher hike.

Councillors voted 5-2 in favour of following that option, with Couns. Sheena Hughes and Cam MacKay voting against it.

Hughes had moved to follow an option by which all new assessment growth would be transferred to general revenues and new revenues would be used to offset base adjustments.

In presenting her motion, which was defeated, she said that while they’re told growth should pay for growth, additional revenue should not be “held hostage” in a reserve account.

She was also concerned that having so many policies in place means council will have nothing left to decide at budget time.

“We don’t have to give away every single ounce of power council has on the budget,” Hughes said. “To be doing what we have been doing is far more transparent.”

MacKay had similar thoughts.

“I’m not very comfortable with putting the budget process on cruise control,” he said.

The new policy will be a tough sell to “Joe Blow” public, MacKay said.

Other councillors pointed out that new business cases, which deal with assessment growth, are still up for council approval.

Coun. Cathy Heron was in favour of the recommended split-percentage approach.

“I’m just a little worried about the future. I really want to see some sort of stabilization of our mill rate,” Heron said. “The status quo, it can’t continue, in my mind.”

She suggested there be a maximum amount that can be put into the new reserve “so we don’t build a war chest.”

Coun. Wes Brodhead said the new policy would take new dollars and set aside some so future impacts for all residents is not as expensive.

“It drives the idea of growth paying for growth,” Brodhead said. “It’s looking at a new way of doing business and I believe that in the long run our residents will see the benefit.”


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