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Council prepares for budget bite

By Timothy Schafer, The Nelson Daily

City staff is recommending a two per cent increase in property taxes as City council girds itself for the final decision on whether to raise City taxes or not this week.

On Monday night council will give their decision and first three readings to the Financial Plan Bylaw 3191 for the 2011 fiscal year, with the final vote coming Wednesday, 3:45 p.m. in council chambers.

There has been a recommendation made to council by City staff on the tax hike — even though they have drafted what is considered a status quo budget — in order to prop up a facility and contingency building reserve to the tune of $175,000.

City staff had reported that delivering a status quo budget resulted in a potential 10.6 per cent tax increase to account for a $743,000 shortfall. The key drivers of the increase were:

• contractual labour increases, $300,000 or 4.6 per cent;

• resolution of labour agreement, $160,000 or 2.5 per cent;

• transit funding increase and revenue decrease, $120,000 or 1.8 per cent;

• other cost increases, 1.7 per cent.

However, by reducing administration costs, not “backfilling” or hiring to replace departing staff ($202,000)., and increasing revenues through parking meter and transit hikes, there would be a zero per cent operating increase and a two per cent increase for the facility/contingency fund.

As well, City staff will be able to make up the difference — without raising taxes — by a reduction in training and travel ($81,000), services ($25,000 for the skunk/raccoon removal program) and utility savings ($20,000). See attached document for breakdown on expenditure reductions and fee hikes.

Fee increases to bylaw ($10,000), parking (meter rise, $106,500), the campground ($20,000), transit (fare increase bringing in $18,750) and revenue from development services ($30,000) and the Youth Centre ($12,000) account for part of the shortfall.

However, City council has a choice. With Nelson property owners already facing three potential hikes in rates from the City’s corner — including water (nine per cent), sewer (seven per cent) and Nelson Hydro (9.6 per cent) — council has the power to ease the burden of the burden they could inflict on Nelsonites this week when the budget is passed.

The three options they have include a zero per cent property tax increase, a one per cent or a two per cent increase, with the latter two helping to contribute funds towards the contingency building reserve, something the City is in dire need of, said City manager Kevin Cormack.

The special council meeting Wednesday will consider adoption of Financial Plan Bylaw 3191, 2011 for the years 2011-2015 and will be held immediately following the Special Committee of the Whole meeting, scheduled to start at 3:45 p.m. in council chambers.

Click here for the special council agenda.