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The crunch isn’t over, Campbell River mayor warns

Property taxes are going up 3.91 per cent for Campbell River homeowners in 2013.

The residential increase equates to $55.43 more per year, based on the average Campbell River home assessed at $268,000.

There will be no increase to any of the other tax classes in 2013.

Though the rate hike is modest compared to last year’s 13.6 per cent increase, not all members of council were thrilled with the budget, which was hammered out Monday and Tuesday in council’s second of a three-year transition to shift the tax burden from heavy industrial to the residential sector.

The budget was approved Tuesday afternoon by councillors Andy Adams, Ryan Mennie, Claire Moglove and Mary Storry. Mayor Walter Jakeway and councillors Ron Kerr and Larry Samson were opposed.

Jakeway said not enough was done to give taxpayers a break.

“This is just terrible, it’s awful,” he said. “We haven’t cut costs, this is the year to cut. Nothing’s gotten better, the crunch isn’t over.

“The process has been good this year because it’s been simplified but the results are not good.”

Jakeway said council’s mistake was not cutting staff at city hall when council was deliberating its base budget in December.

He said he would like to see $3.5 million in staff cuts and put towards the city’s $6 million debt as well as badly needed water and sewer infrastructure projects which will require the city to borrow funding, further increasing the city’s debt.

On Monday, council approved a water and sewer capital plan that endorses the city borrowing up to $15 million over 15 years to pay for nearly $60 million in projects between 2013 and 2017.

Jakeway said that will likely not sit well with taxpayers.

“What we’ve done is a dramatic change,” he said. “I think we’re going to be criticized. My concern is we didn’t cut enough.”

Jakeway pointed to projects contained within council reserve funds, which are similar to a piggy bank. Reserves receive annual contributions from the city while others are funded by outside agencies.

The Community Works Fund, for example, is funded by federal gas tax rebates while the Gaming reserve is sustained by provincial casino revenues.

Jakeway said if it was up to him, he would have cut items such as $64,000 for pedestrian crossing signals and $100,000 for cycling upgrades from the Community Works Fund reserve; as well as $500,000 for a ladder fire truck replacement from the Capital Works reserve.

While taking funding from the reserves does not have an impact on taxation in the year its withdrawn, it can down the road as money that is taken out of the reserves needs to be replaced by council in future years.

Coun. Moglove was concerned council drew too heavily on reserves in 2013.

“Yesterday (Monday) I said we were sleep walking to the abyss,” Moglove said. “I would say since then we took so much from reserves that we have gone to a jog. I appreciate all the work council has done in the last couple of days.

“Where I find it difficult, is with this budget what we are doing, in my opinion, is simply postponing a tax increase to future councils, specifically for infrastructure and facilities, and we’ll be taking money out of reserves and not putting anything in and if we are putting something in, it’s not nearly enough.”

Moglove said the practise is unsustainable and will only hurt more in the long run.

“Think about your house,” she said. “You spend more than $100 a year to maintain your house and if you don’t maintain your house, costs go up and up. While I appreciate keeping taxes low, I think we will pay the piper in the end.”

Coun. Adams, chair of the city’s Finance Committee, agreed that council is burdening future councils.

“Depending on reserves is just simply unsustainable and staff has been doing a magic act to keep things together but we are going to have to pay the piper,” Adams said. “The only hope is that we have provided enough stimulus in sending a message out there that at least  keeping the (tax) level where it is that we attract people to generate the revenues (to replenish reserves).

“We need to find ways to contribute into those reserves to stabilize financial plans going forwards,” Adams added. “To just not contribute or to defer is passing the buck onto future councils and future taxpayers.”

Coun. Samson attempted a last ditch effort to reduce the tax level even further.

He proposed council fund one per cent of the 3.91 per cent tax increase using the gaming reserve, to lower the tax hike to 2.91 per cent.

“I realize we’re in a transition year this year from heavy industrial but I think the gaming reserve can handle a one per cent decrease...to help offset a tax increase to our citizens,” Samson said. “I know you can’t rely on reserves but savings are for rainy days.”

Samson’s motion, however, was defeated by councillors Adams, Mennie, Moglove and Storry.

Before wrapping up financial planning, Adams thanked Jakeway for entrusting him with chairing the Finance Committee and gave accolades to the city’s general managers for getting the base budget to council in December, the earliest it’s been presented in recent history, as well as to City Manager Andy Laidlaw and General Manager of Corporate Services Laura Ciarniello, who led a simplified, straightforward budget process this year.

 

Items funded through general taxation in 2013:

  • One per cent of the tax increase ($156,000) put towards the city’s Capital Works Reserve for new and replacement of capital infrastructure (roads, equipment, city facilities).
  • Human resources information system at $25,000
  • An undisclosed $7,500 in-camera decision
  • Airport Air Service Development at $40,000
  • $5,000 put into the city’s Recreational Equipment Reserve
  • Restoration of 50 per cent of last year’s budget cuts to the city facility repairs and maintenance, a total of $45,000
  • Restoration of 50 per cent of last year’s budget cuts to city horticulture (i.e. city welcome sign, Sea Walk), a cost of $24,500
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