St. Albert city council says administration's recent three-year forecast of property tax increases carries little weight, as estimates are always changing and decisions made during budget deliberations can have drastic impacts.
The three-year forecast pegged 2024's property tax increase at about 4.8 per cent, followed by 3.9 per cent in 2025 and 5.3 per cent in 2026.
The increases, according to the city's report, largely account for the need to maintain service levels because the forecast didn't consider or factor in any planned growth or capital projects, meaning any increases could be higher depending on future council decisions.
For example, some major projects which would involve taking on debt coming to council in the foreseeable future include the community amenities site planned for the city's northwest end, the servicing of the Lakeview Business District, and a long-list of pre-planned projects that went unfunded in the 2023 budget, such as the roughly $10.9 million Heritage Park renovation and event grounds.
In the case of the community amenities site, administration is currently refining a concept plan for the facility to bring before council sometime this summer. Although the refined concept will come with updated estimates, the city's proposed 2023 budget states that administration presumes $15.5 million would be needed annually for construction costs until at least 2032.
“We're just getting the forecasts,” Coun. Ken MacKay said, adding, “you're basically looking out and you're trying to use as much data, use as much information as you possibly can, but at the end of the (day), it's really a best guess.”
“This is the administration's best guess and now we have to work through it and see what (the tax increase) actually is when we're actually looking at doing the budget in real-time.”
When asked, MacKay said he thought city infrastructure projects such as roads and utilities will need to be prioritized moving forward.
“I would love to be able to, say, work with the Arts and Heritage Foundation on (Heritage Park) — that would be so unique, and very well used by the public — but I wouldn't compare it to roads and other necessary infrastructure,” he said.
Coun Shelley Biermanski said she also felt that council will have to prioritize some projects over others, however she said council should do so on a project-by-project basis.
“I think it's very important to get our priorities in concrete order before we start borrowing for anything,” Biermanski said, using council's recent approval of the $21.5 million Villeneuve Road borrowing bylaw as an example.
“It's not like there's no road there,” she said. “There's a road there but we're making a pretty road.”
Until a draft of the 2024 budget is presented to council in October, Biermanski said she didn't want residents to expect that next year's proposed tax increase will reflect administration's forecast.
Likewise, Coun. Sheena Hughes thinks that since the forecast doesn't include planned growth projects, the tax increase proposed for 2024 will initially be higher than the 4.8 per cent administration has estimated.
“I am just not sure about whether or not we are really expecting a 4.8 per cent to start or if it's really going to be closer to 8-9 per cent again when we start,” Hughes said. “As far as what we're going to do to reduce the taxes, I am going to parse that budget and every option I have to reduce it.”
“To me, 4.8 per cent is still too high, so I will do everything within my power to try to find ways to do it without compromising the standards that we set for St. Albert as far as delivery of services go.”
No need to stress yet
For Coun. Wes Brodhead, having a three-year forecast that excludes yet-to-be approved projects presents a unique opportunity to understand how service levels impact the city's budget.
“Forecasts are a flag, if you will, to council and to the citizens at large that say, ‘look, this is what may happen in the future, you need to be prepared and council needs to understand that if we're maintaining our current level of service then this is our best guess at what the next three years of tax increases are required to be’,” Brodhead said.
“Council, we do our best to take a look at each element of that tax increase and see if we can do something better, or if we actually have to swallow that.”
Brodhead said he expects council to closely consider the costs of future projects, such as servicing Lakeview Business District, as any additional borrowing will increase property taxes.
“If the provincial government is throwing $330 million at Calgary for their sports arena, St. Albert could use a little bit of (funding) to deal with some employment-related construction,” he said. “That would really do the city well.”
Likewise, Coun. Mike Killick said he felt servicing Lakeview Business District should be council's first priority moving forward.
“We really have to focus on Lakeview Business District and attracting more businesses ... because if we don't do that the burden of taxes will always be on residents,” he said. “We need to try and shift that over to having more tax dollars come from businesses and less from individual homeowners.”
An estimated cost for servicing the new business district west of Ray Gibbon Drive has not been presented to council yet, however Mayor Cathy Heron told the Gazette in March that she guessed it would be between $60-$80 million.
As the administration's three-year forecast largely represented the tax increases necessary to maintain service levels, Killick said the city's everyday costs for fuel and electricity have increased, just as residents have also been experiencing.
“Tax increases are driven a lot by operational realities,” he said. “The city faces the same things that residents face.”
“We know prices for everything are going up.”
Mayor Cathy Heron and Coun. Natalie Joly were both unavailable for an interview.
