City Proposes "Modest" Tax Increase - Hikes To Water/Sewer Rates And Infrastructure Levy

The term status quo is out and the word modest is the new catch phrase as the City released highlights and its proposed budget on Friday afternoon.

The proposed budget will see an increase of 2.02 percent in property taxes and increases of six percent in water rates and five percent in sewer rates. The proposed budget also includes a flat tax or annual Infrastructure Levy of $85.

The $15 Hospital Levy is gone as the City has paid its required share of the Wigmore Hospital.

In the meeting which approved reducing and then eliminating the Hospital Levy mention was made of a new levy. The defunct Hospital Levy would be replaced with a new levy dedicated to infrastructure but not a defined area such as cast iron water main replacement. SEE RELATED - Hospital Levy Reduced and Infrastructure Levy Mentioned

The Infrastructure Levy has been a contentious point at Council with at least one councillor referring to it as just one manner - with increasing garbage and recycling charges - of creatively masking the true amount of increases taxpayers are facing as well as shifting the tax burden from higher value to lower value homes. SEE RELATED - Proposed Levy May Be Washed Up Major Tax Increase Without Levy - Hidden Tax Shift To The Poor

In the Friday afternoon news release the tax increase was described as modest and that with the 2.02 percent tax increase an average home with a value of $258,000 will pay $1593.30 annually or $132.78 monthly in the City portion of property taxes. The other larger portion of property taxes paid by home owners - school taxes - is NOT included in the figure. The average home will pay an additonal $114.57 annually or $9.54 monthly as the City’s portion of property taxes.

The proposed water rate increase of six percent and sewer rate increase of five percent are justified in the release as necessary to pay for replacement of the City’s rapidly deterioating water infrastructure including cast iron water main replacement.

As part of the proposed (Five Year Capital) budget there will be increases of 50 percent in the amount of funding allocated to the cast iron water main replacement program. The proposed budget includes increased spending of $3.3 million in 2020 and $3.3 million in 2021 with assistance from the Investing In Canada Infrastructure program on cast iron water main replacement.

It needs to be noted the City presently pays what has been described as a franchise fee by Councillor Brian Swanson from the waterworks utility to the City’s operating budget to fund operations unrelated to water security.

The proposed 2.02 percent tax increase includes one percent dedicated to Leisure Services as a means of maintaining City facilities.

“Our prime focus is the City’s water main replacement program, however we need to ensure funds are available to repair aging City facilities. Not addressing those maintenance realities leaves the potential for large-scale issues in the future,” city manager Jim Puffalt said in a statement.

A key area stressed in the release were efficiencies found in the 2019 Budget where engineering design work - including the cast iron water main replacement program - was moved in-house saving the City $500,000.

The $500,000 saving was allocated to hiring a second construction crew and purchasing a hydro-vac unit to deal with the backlog of mounting repairs to the waterworks utility. Once the crew catches up on the backlpg of repairs they will be converted to a construction crew. There is no timeline given as to when the crew will catch up on the mounting backlog of repairs although the tipping point of when repairs are reduced and funding can go towards replacement has been estimated in the last three years to be five years in the future. SEE RELATED - City To Hire Second Crew

Missing from the release is any mention of an on-line 'survey’ of 211 people that was de-bunked as holding no statistical value by a statistician and conceded to by the City in a statement in a previous MJ Independent article. SEE RELATED - Fact Checker - Survey Has No Statistical Value

Budget Committee deliberations kick off Monday evening at 5:30 pm in City Council chambers with presentations from third party groups the public is allowed and encouraged to attend.

For the full budget click here.