By Timothy Schafer, The Nelson Daily
Put another bullet in the chamber as the assault on taxpayer’s wallets in Nelson continues.
A two per cent property tax increase is as good as a done deal as City council approved first, second and third reading of the Financial Plan Bylaw 3191 for the 2011 fiscal year on Monday night in their regular council meeting.
Save for the pleas of Coun. Bob Adams, deliberation on the increase was nonexistent, but rationale for the two per cent increase in property taxes — about $90 per year for the average homeowner in Nelson — was rife.
Coun. Donna Macdonald said this was the toughest, scariest budget process she has been through in over 15 years of politics.
The horror likely comes from the combination of punches Nelsonites are being delivered this year in the form of rate hikes on all fronts.
Consider three potential hikes in utility rates from the City’s corner — including water (nine per cent), sewer (seven per cent) and Nelson Hydro (9.6 per cent) — and add in the regional district, school board and health board as they have yet to reveal if they too will be asking for a tax increase, and 2011 is indeed a fiscal chamber of horrors.
But City staff were able to account for a $743,000 shortfall in the budget and make it up in other areas to minimize the effect of an increase, said Coun. Macdonald.
“(City staff’s) very creative and dedicated work resulted in this,” she said.
The City had to find a way to absorb contractual labour increases of $300,000 or 4.6 per cent, a resolution of a labour agreement worth $160,000 or 2.5 per cent, a transit revenue decrease of $120,000 or 1.8 per cent and other cost increases of 1.7 per cent.
Coun. Kim Charlesworth said it was worth repeating the potential 10.6 per cent tax increase — to account for the $743,000 shortfall — was a very direct link between what is agreed to as a council (in fair negotiation with City staff as salary increases) with what ends up on council’s plate at budget time.
“This has been a wake up call for everybody. We have to be more aware of where we are going with salary increases in the City, where we are going with service levels, because things aren’t going to get any easier in this,” she said.
City manager Kevin Cormack explained the key component of the 2011 budget was to continue addressing the infrastructure renewal program. The City has over $500 million in assets that need to be replaced.
“Right now we are contributing about $5 million a year into reserve funds to manage those assets,” he said.
The City won’t be taking on substantial new debt to manage infrastructure costs, he said. The City has around $1 million in actual debt, but $19 million overall, including carrying debt for Nelson Hydro and Terasen Gas.
The one reserve account of concern — the capital reserve account — funds the road maintenance program. Unless additional funding went into the account it would be running a deficit next year, said Cormack.
Around $200,000 of the parking meter revenue — funded by a doubling of the parking meter rates from 50 cents per hour to one dollar — will go into that reserve account.
“It will allow us to retain the current level of that service,” said Cormack.
The $83,750 surplus as presented at the public open house on the budget two weeks ago will be reduced as council asked for the re-inclusion of non domestic animal control ($15,000), as well as bylaw and policy updating ($20,000).
The two per cent property tax increase will add around $130,000 to the budget. Combined with the $48,750 surplus, around $175,000 of that will be transferred to the water licence and building reserve funds. That money is used for capital projects but was being depleted without much going back in, said Cormack.
The three options council had included 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.
A 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.