Homeowners looking at 2.25 per cent tax increase

Campbell River homeowners are facing a 2.25 per cent, or $31.72, tax increase after day one of budget planning wrapped up Monday.

Council met at city hall for about three hours to work out its base budget – the first of three parts to the 2014-2018 financial plan.

Service level change requests as well as the capital budget will be deliberated Jan. 16 and Jan. 29 respectively.

In addition to the 2.25 per cent residential tax hike as of Monday afternoon, council also decided on a zero per cent tax increase for the business class.

“I don’t think the medium and small businesses have fully recovered from the (economic) hit,” said Coun. Andy Adams who has the finance portfolio. “I know most business owners are also residential property owners and to give them a double whammy I don’t think is the prudent thing to do.”

Coun. Claire Moglove said businesses are vital to the health of the community and as such, the city needs to take care of them.

“It’s businesses that drive the economy of Campbell River and I agree with Coun. Adams that I don’t think businesses have recovered from the economic hit,” Moglove said.

Still, despite the business sector not seeing a tax increase, council did take steps towards lessening the tax burden on the residential sector by increasing taxes for managed forest lands and utilities (class 2).

While the city has more managed forest lands than any other B.C. municipality, Campbell River raises less money from that tax class than other Island communities because of its historically low tax rates.

But over the next three years, taxes will be set at the average tax rate charged by other B.C. communities, which will generate an additional $100,031 in revenue for the city.

Council also elected to increase taxes for the utilities class 2 sector, starting in 2014, but have the increases phased in over four years, with the first year’s increase to be one-half of the increase in the three subsequent years.

Coun. Claire Moglove said her reasoning for pitching the smaller increase in year one is to accommodate most of the companies that have already done their budgets for next year.

“In the utilities class, I have some sympathy that they’ve already done their budget,” Moglove said. “However, I think phasing in the increase in 2014 is still reasonable.”

Coun. Adams agreed with Moglove, and said she had “found a compromise” that relieves the residential homeowners from shouldering the brunt of city taxation and increasing what he said has been an “extremely favourable rate for utilities in Campbell River.”

Coun. Larry Samson disagreed and thought it should be phased in over five years to make the increases more manageable while Mayor Walter Jakeway said for the private companies, changing their budgets now would be “extremely difficult.”

The majority of council, however agreed with Moglove and Adams, and voted in favour of increasing the rate as of 2014.

Moglove’s next motion, though, did not go as smoothly.

Council rejected increasing taxes by another one per cent to put towards the city’s Capital Works Fund to fund new and replacements to infrastructure in 2014.

“This is a start to putting money aside for capital that is coming down the pipe,” Moglove said. “This one per cent, in some respects, is a drop in the bucket but at least it’s a start. The taxpayers and residents of Campbell River know that roads need to be fixed and drains need to be fixed.”

But the majority of council felt it was too early to be adding another percentage increase and Moglove’s motion was defeated.

Council also rejected recommendations from city staff to re-instate a $15,000 annual contribution to a city account for small fire equipment purchases and replacements, as well as an yearly contribution of $160,945 to the fire reserve account for larger purchases such as fire trucks.

Council also said no to re-instating the annual contribution of $400,000 to the city’s fleet replacement reserve, which last year was cut down to $200,000.

Lastly, 15 per cent or $90,000 of the annual gaming fund revenues will go to the capital works reserve and $150,000 of the annual gaming fund revenues will go to council contingency.

For more on the budget, see Friday’s Campbell River Mirror.

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