St. Albert city council has voted to update its financial policies, including increasing the threshold of when prior year assessment growth revenue may be considered to five per cent, an increase from 3.5 per cent.
After two days of debate, first during the July 8 standing committee of the whole meeting and then during their July 15 city council meeting, council has approved updates to two of its financial policies. The main point of contention in one policy currently says:
"Application of prior years assessment growth revenue may be considered if the proposed annual tax rate increase is in excess of 3.5 per cent. The funds approved by Council for withdrawal from the prior years unallocated assessment growth shall be only the amount required to limit the tax rate increase to 3.5 percent."
St. Albert city council used the prior year's assessment growth to help offset this past year's municipal property tax increase to 2.9 per cent, from the proposed 3.6 per cent in December 2024.
City administration was recommending that council increase those instances of 3.5 per cent to 6.5 per cent. Administration said that the increase would see that assessment growth wouldn't be utilized every year, which city staff said would see the city saving money to be used down the road, for larger projects like a fire hall or the community amenities site.
The proposal brought ire particularly from Coun. Sheena Hughes, who questioned why there was a need for the increase when it has been in the budget for 3.5 per cent.
She introduced a motion to keep it at 3.5 per cent, while Coun. Ken MacKay introduced an amending motion to change it from 3.5 per cent to five per cent. MacKay felt this could be a "win-win" scenario.
"I want to support administration but I just think 6.5 is too high -- because I know in the past we've been able to use this as a very successful tool to manage tax increases," MacKay said during the July 8 committee meeting. Ultimately, his motion was defeated by a vote of 4-3 with MacKay, Coun. Mike Killick, and St. Albert Mayor Cathy Heron in favour.
Hughes said she was strongly against the increase because she felt it sent the message to residents that a 6.5 per cent tax increase would be the new normal.
During the July 8 committee of the whole meeting, Hughes' amending motion was passed. However, on the July 15 city council meeting, Coun. Natalie Joly proposed an amendment to replace 6.5 with five.
Joly said that although she felt her and Hughes agreed about trying to keep tax increases as low as possible, she felt that a five per cent threshold would help the city do things differently if the next council wants to keep the tax increases low.
She added that the year before she was elected, the tax rate in St. Albert decreased, which she said has created a number of challenges for council the past two terms.
"We have such significant pressures in terms of provincial downloading of costs, in terms of our growth capital deficit. I would love to see that five per cent be that fire under the next council, really encouraging them to make decisions that are keeping that tax rate in mind and trying to keep it as low as possible," Joly said.
Hughes pushed back and said that she felt each year's tax increase is individual. Ultimately Joly's motion passed by a vote of 4-3, with councillors Biermanski, Brodhead, and Hughes opposed.
Amendments to the policy also confirmed the first annual transfer of $800,000 into the Growth Stabilization Fund for the Lakeview Accelerator Program, which council passed in April. The transfers happen annually until a balance of $8 million is reached, which administration said reaffirms council's commitment to expanding St. Albert's non-residential tax growth.