City proposing tax increase to help offset $5.6 million deficit

FORT ST. JOHN, B.C. — The City of Fort St. John has released the first draft of its operational budget, which will see residents pay, on average, $154 in property taxes to help offset its $5.6 million deficit. 

Council will be presented with the proposed operating budget and staff recommendations during their committee meeting on Monday, January 23rd.

City staff have proposed to increase the resident tax rate by three per cent, which would mean the average home would see an increase to their tax bill of $154 in 2023. On top of the proposed tax rate, property assessments increased in Fort St. John. The residential tax rate in 2022 was 5.1865, and City staff have proposed increasing it to 5.3431.

This tax increase is meant to provide a total of $1,856,447 towards the deficit. 

The report to council highlights three major areas contributing to the deficit.

Staffing costs such as salaries, wages, and benefits are expected to increase by $2.3 million over 2022. Contracted and general services such as the RCMP make up a total of $2 million in extra costs, including a $798,000 hike in the RCMP budget. Finally, material goods and supplies make up the last $1.7 million of the deficit.

Besides an increase in taxes, Chief Financial Officer, David Joy, proposed the remaining offset come from a transfer of $3,022,000 from the Peace River Agreement (PRA) and nearly $791,405 from the Contingency Reserve. 

According to Joy, the transfer of over $3 million from the PRA would be 11.55 per cent of the year’s allotment. He stated further that the city could not rely on mechanisms such as the PRA and Contingency Reserve to offset deficits in the future. 

“Any reduction of this transfer would require an increase in tax revenue to balance the operating budget,” Joy stated. “Such an annual transfer is a reflection of the increase in additional capital assets to the City’s inventory and the services required to maintain this additional inventory.”

City council is being asked to review and approve the capital budget in their next meeting as well.

The 2023 capital budget is looking to spend a total of $52,236,857 on capital projects in 2023. The plan is fully financed by the Peace River Agreement and other grant revenue, capital reserves, water and sewer reserves, developer contributions, and borrowing.

Transportation, roads, and sidewalk projects are budgeted to cost the most at $22.2 million, with facilities, buildings, and parks coming in second at $14.1 million. 

Some of the major projects mentioned include the ongoing rebuilding of the downtown core, the redevelopment of Kin Park, and trail upgrades at Sureus Park. 

City staff will receive both budgets in their next council meeting on January 23rd.

The entire budget draft report for 2023 can be read below: