Council was presented with two possible ways of doing that: increasing revenue in other areas like from user fees, diverting Fair Share funds from the capital budget or taking more from the Tax Stabilization Reserve; and decreasing expenditures by reducing levels of service in the operating budget. As she has in the past, City Manager Dianne Hunter warned against using more from Fair Share Funds and the Tax Stabilization Reserve, as the reserve has to be replenished and Fair Share has an end date of 2019.
“Going to [the Tax Stabilization Reserve] as a source of funding, you’re really just deferring it to 2015… versus actually finding a new source of funding,” she argues, adding, “One of the risks that you run as you move forward is the more you rely on Fair Share for operating, all you get is really deferring the tax increase that you would have to adjust your operating budget by.”
Some of the pressures the City has faced in setting its budgets for next year include higher wages due to the need for more staff, more interest from additional debt taken on last year, as well as a 15.8 per cent increase in utility costs over 2013.
“We’re going to have more staff, we’re going to need more staff, we need to be open that as a growing city the population is going to have to pay a little bit more,” reasons Councillor Byron Stewart.
Hunter also adds that as the city is growing in both population and development, it means there’s more demand for service.
“We can’t even provide the same level of snow clearing as we did last year, assuming the same level of snow this year as we did last year, just from the sheer fact that the community has grown, there’s more streets to plow,” she notes. “There is an expectation that our service levels will be maintained at least at what they were in 2013, and there’s always areas that people want to see an improvement.”
Ideas like cutting some of the City’s action plans, its new Economic Development department, or the number of capital projects were all brought up as options, but in the end council decided not to reduce service.
Looking ahead long-term, council has been advised to take another look at the approximately $700,000 in permissive tax exemptions it doles out each year, as well other areas where costs can be decreased.
“What we maybe need to do is focus some of our time next year on figuring out what these new capitals are costing us on the operations side if we develop a new policy after some hard work goes into it,” suggests Councillor Trevor Bolin.
The operating budget, along with the capital budget, is set for first three readings on December 9, and adoption on January 13, 2014.
What a nearly six per cent tax revenue increase will mean for individual residents won’t be determined until the City passes its Tax Rate Bylaw and property owners receive their assessment notice in the New Year.