Municipal taxes bump by inflationary rate as city delivers ‘ambitious’ budget
By Timothy Schafer
After a zero per cent increase to taxes in the initial throes of COVID-19 in 2020, council has nudged the line by 1.75 per cent in 2021 amidst the third wave of the virus.
The increase — approved by council last week in its regular (online) meeting — is considered inflationary because it is offset by the $2.6 million in COVID-19 Safe Restart grant funding the city received in late 2020.
This one-time grant was extremely helpful in covering revenue shortfalls of $747,000 in addition to covering $653,000 of additional expenses the city incurred due to the pandemic in 2020, noted city chief financial officer Colin McClure in his report to council.
“This took the pressure off the surplus that council had committed to in 2020 in order to keep municipal services at normal levels and not increase taxes last year,” he said.
This year over $1 million of that grant money will be used to cover future potential revenue shortfalls, fund technology improvements at the city and provide funding for a grant program for not-for-profit entities in the community that need support to recover from the pandemic, McClure explained.
Other city costs are going up. Earlier this year an increase to water and sanitary rates was approved to the tune of a combined 1.75 per cent — or an increase of $17 for a single-family home over 2020. There was no increase to commercial property utility rates for 2021.
However, the annual rate for residential resource recovery was kept at the $75 per year. It had been increased by $35 in 2020 to purchase the recycling blue bins for each home. This year the additional money will be used for setting up for organics diversion.
For the average single family dwelling ($504,000), the municipal property taxes for 2021 have jumped to $1,747, for a net change of $29. Water rates have risen on average (annual, after discount) by $7 to $372, while sewer rates have risen by $10 to $699 per year.
The total municipal tax take, including the resource recovery cost, will be $2,984 on the average single family home, an extra $46 per year.
Taking it to the ‘Net
The 2021-2025 Financial Plan process included numerous internal, external and public meetings over the past six months to review current financial performance, budgetary pressures and forecasted departmental budgets.
The budget (virtual) open house was held April 7 from City Hall with the presentation streamed online for the third year — the exclusive method of delivering the 2021 budget presentation due to the COVID-19 outbreak.
The YouTube link to the 2021 budget presentation video and a pdf of the presentation is available through the city’s website (https://www.nelson.ca/).
Five-Year Financial Plan
The plan includes the revenues and expenditures planned for 2020–2024 that have been presented to both council and the public.
All proposed expenditures, funding sources and transfers to or between funds must be included in the plan.
Section 165 of the Community Charter requires that a financial plan be adopted annually, by bylaw, before the annual Tax Rate Bylaw is adopted.
Legislation implemented in 2008 requires council to make explicit statements about each of the following:
• The proportions of revenue proposed to come from various funding sources;
• The distribution of property taxes among property classes; and
• The use of permissive tax exemptions.
Source: City of Nelson
Safe Restart
Part of the help the city has given to the restaurant industry — waiving patio and sidewalk fees for 2021 — was from the leftover Safe Restart funds, which became necessary with the announcement of the cancellation of sit-down dinning earlier this month.
The city with the plan
McClure characterized the new financial plan proposed for 2021 as “ambitious,” valued at over $22 million.
He said the city has already been approved for $1.8 million in grants to fund the construction of a new waterfront pier, improve wayfinding signage, build the washroom and other improvements at Cottonwood Park, and undertake upgrades at the Norman Stibbs Airfield.
“These new projects are in addition to the ongoing annual $1.2 million in paving and sidewalk upgrades that council has committed funds towards in order to improve our city’s vehicle and active transportation system,” he said in his report to council.
And there’s more. There is a plan for a $4.4 million project to build a pump house and water pipeline from Anderson Creek to the Mountain Station Reservoir — a move that will complete a $6 million grant-funded secondary water source project that started last year with the installation of a pipe connecting Selous Creek and the reservoir.
“It is important to note that some of the larger building projects, like the new library and the Civic Centre revitalization, are included in the budget but are grant dependent,” McClure said.
The rate of tax
Residential assessment values for this year have jumped by 6.8 per cent but commercial assessments dropped by 2.4 per cent.
McClure said it was council’s objective to maintain the same tax rate ratios as previous years — 74 per cent residential and 25 per cent commercial — in preparing the 2021–2025 Financial Plan and 2021 Tax Rate Bylaw using the fixed share approach.
The fixed share approach involves keeping the share of the tax levy collected from each property class constant, except where changes are due to non-market changes such as growth.
The result is the same 74 and 25 per cent residential and commercial ratio of the total municipal tax burden.
Source: City of Nelson
