The increase to St. Albert’s property taxes is drawing closer to one per cent after city council added another half a million dollars to the approved 2019 budget.
Originally, taxes were set to go up by 0.4 per cent, thanks in part to the new electrical franchise fee offsetting the tax burden a bit. On Monday, council decided to add another $500,000 to the operating budget, which brought the increase to roughly 0.9 per cent. This means instead of an $11 increase for an average St. Albert home valued at $450,000, the amount will be closer to $33.
The tax rate is scheduled to be presented to council for official approval at the May 21 meeting.
Mayor Cathy Heron, who put forward the motion to add the $500,000 to the budget, said repair, maintain and replace (RMR) projects need to be a number one priority for council.
“Currently, our practice is to essentially borrow from life cycle reserves to fund our growth projects out of the funding formula, which leaves our current assets at risk,” she said. “An organization that cannot fund expenditures related to existing assets from core revenue sources is effectively living beyond its means. We also need to fund those existing assets. We have knowingly been underfunding them for years, living on the hope and sometimes prayer, that other levels of government will step in and bail us out.”
The additional cash is meant to help address a yearly $16.2-million shortfall in covering RMR costs. The deficit is primarily in the area of repairing, maintaining and replacing city assets and infrastructures like facilities and vehicles. The city relies heavily on grants to keep RMR projects afloat but the ultimate goal is for St. Albert to cover these expenses itself.
This is on top of a $349-million financial gap in the 10-year growth capital plan, which council is also working to whittle down.
Diane McMordie, director of financial services, told council administration would be coming back with a long-term plan for how to address the shortfalls sometime in June.
“This motion would just allow us to get that sort of extra step one year earlier rather than if we wait until June to make any policy decisions around that,” McMordie told council prior to the vote. “The first time we would be able to impact that would be for the 2020 budget. So this would just sort of allow us to start a little bit earlier. Our shortfall is in the multi-millions of dollars a year. So $500,000 is just a little step towards that.”
One way the city could address this is by increasing property taxes at a standard rate. At one council meeting, it was suggested this could be achieved at a one per cent annual increase over a long period of time.
Coun. Sheena Hughes said the one per cent increase was misleading because the additional $500,000 brings it up to 1.5 per cent in addition to the electrical franchise fee, which she opposes.
“We’re not actually contributing all of the additional money that people are going to be paying just to survive and live in the city for one more year,” she said. “I appreciate what you are trying to do. I would rather see it come forward as an actual plan.”
Heron’s motion passed unanimously.
