St. Albertans could be facing a 3.1-per-cent overall property tax hike next year – or more if council goes ahead with several major capital projects.
The city’s proposed capital and operating budgets were made public as part of the agenda package for the Oct. 24 council meeting. There was little discussion of the budget at the meeting itself, as there will now be public consultations and several special council meetings over the next six weeks to finalize its contents.
Interim city manager Chris Jardine explained the budget document – presented in conjunction with the city’s three-year corporate business plan – represents the efforts of staff across all city departments. They will piece together what it’s going to cost to maintain service levels or increase them in accordance with established policy and council direction.
“The annual budget is very much developed from the bottom up,” he said. “There’s a significant amount of scrutiny, diligence and thought that goes into its development.”
He explained with the administrative work finished, it’s now up to council to take the input from residents and refine the budget into the final product, which is tentatively scheduled for approval in December.
Residents will have ample opportunity to make their voices heard in the meantime. A World Café event is scheduled for Nov. 2, in which a random sample of residents is invited to provide feedback in an informal setting. A public open house, which is open to all residents, is scheduled for Nov. 3.
Special budget council meetings are scheduled for Nov. 8, 10 and 15 from 2 p.m. to 7 p.m. Council members have mid-month deadlines for budget information requests and postponed motions they would like to debate, and deliberations will take place at meetings scheduled for Nov. 24, 29 and if needed, Dec. 1.
If all goes according to schedule, council will debate the final 2017 budget at the Dec. 12 meeting.
The budget itself is split into four main components: the operating and capital budgets for municipal services, and the operating and capital budgets for utilities.
With respect to municipal services, proposed operating expenses have increased by $2.9 million to $95.9 million. This includes the cost of maintaining current services and planning to maintain services into the future. Some of the factors driving the increase are increases in wages and benefits, as well as inflation in the cost of contracted services and materials.
For example, the provincial carbon tax will cost the city an additional $136,500 next year, while minimum wage increases will see the city pay an additional $29,600.
Revenues have risen in part due to a $2.8 million increase in assessment values, as well as the proposed property tax increase.
The proposed capital budget includes expenditures of $52.5 million, funded through a combination of grants, reserves, and possible borrowing. There is currently a $10.6 million funding shortfall for projects.
This shortfall comes after Jardine presented a shorter list of capital projects to council Sept. 26. He identified projects required to maintain existing infrastructure and projects that were “growth” projects including a new branch library and a new arena ice surface.
Even with the trimmed list, the shortfall would mean borrowing the $10.6 million to cover all those projects – which would mean an additional tax increase of 0.3 per cent in 2017 and 2.1 per cent in 2018.
A projected 10-year trend shows a combined total of $631 million capital spending, of which $267 million will be required for repairing, maintaining and replacing existing infrastructure.
“The city does have a challenge going forward with regard to our municipal capital program,” he said.
On the utilities side, residents will get some relief – although the proposed 2.2-per-cent decrease on bills will only amount to a savings of a few dollars per month.
The utility rate includes water, wastewater, storm water and solid-waste pickup. The percentage decrease is based on a family using 20 cubic metres of water per month, with a 240-litre garbage container.
The 3.1-per-cent proposed property tax increase is higher than the five-year average of 1.8 per cent. It’s higher than last year’s decrease of 0.4 per cent, but only slightly higher than the increases levied in 2012-2015.
Proposed tax increases only account for the municipal portion of property taxes, so the actual percentage increase could be higher than what council approves. Requisitions from the Sturgeon Foundation to fund seniors’ housing are included in the final property tax bill, as are requisitions from Alberta Education for schools.
