FORT ST. JOHN, B.C – Chief Financial Officer David Joy says Fort St. John has “room to maneuver” with increasing taxes for years to come while remaining one of the lowest compared to other B.C communities.
The CFO presented a report to council Monday forecasting an increase in taxes “year after year for the years ahead” to combat upcoming challenges. Joy says municipal tax revenue hasn’t increased since 2016 while expenses have over three per cent per year.
If property assessments remain the same next year, an “automatic” 1.9 per cent increase will be required to replenish contingencies and reserves used during the COVID-19 pandemic.
“As noted with the presentation of the 2021 operating budget and with the report to Council on the 2020 year-end operating results analysis, the city faces further budget challenges for 2022,” says the report.
The city will also continue transitioning fire service revenue into its capital reserves, such as the Site C agreement.
Next year’s increase does not include inflationary increases in HR costs and other expenses.
“As always, administration will look to generate additional non-tax revenue and reduce expenses wherever possible,’ says Joy in the report.
For two years in a row, the administration has focused on reducing the annual operating surpluses from 7.54 per cent to less than 1 per cent, says the report.
“Technically, Council can rest assured that revenues have not been understated nor have expenses been overstated in the development of its operating budgets,” says the report.
A chart in Joy’s report shows taxes collected from an average home in Fort St. John is lower than other communities in northern B.C.
After receiving public criticism for the tax hike, Joy says it’s important for the city to put everything into perspective.
“The numbers come straight from the province,” notes Joy during council.
Fort St. John ranks ninth lowest out of ten communities in the north, 19th out of 21 municipalities with a similar house value, and 20th out of 21 communities across B.C with a similar population.
The city is the third-highest compared to 7 municipalities in the Peace River Regional District
“We should recognize that we are very much a regional hub for the surrounding area,’ states Joy’s report.
The city also has the lowest taxes compared to eight other resource communities in the province.
“However, the analysis of Fort St. John’s municipal tax revenue, when ‘sliced and diced’ different ways, is a testament of the City’s competitiveness when compared to other municipalities in BC,” says the report.
Council commends Joy’s report for delivering a better understanding of the tax increase and showing where the city stands compared to other municipalities in the province.
Homeowners will see a 2.5 per cent rise in taxes this year, around $38 for the average house, to assist in balancing the city’s $3.6 million deficit.
Recreational and non-profit taxes will increase by $124, commercial taxes will see a $293 jump, light industry will go up by $683, and major industry pays slightly over $9,150 more.
“There is never a good time to increase tax revenue, and there was some public criticism when we increased tax revenue for the first time in 5 years.”
The final reading of the 2021 tax rates bylaw was approved after Joy’s report was presented to council on May 10th.