After keeping this year’s property tax increase below 3.5%, it doesn’t look like the city will be able to avoid a larger increase next year.
Council will have to make some hard decisions at budget time, according to the numbers presented this week by Chief Financial Officer Alaina Maher.
“We will continue to investigate measures to implement for 2025 financial planning to bring down the projected tax increase another 2.9%, or $1.2 million, in order to be within the policy threshold of 3.5%,” she said at a Committee of the Whole meeting. “This is significant and will impact service levels.”
Maher presented a budget analysis and financial forecast for next year and so far, without any changes, the city is looking at a 9.15% property tax increase just to maintain existing services.
Maher says that’s because costs have gone up, particularly wages and benefits, which alone will account for a 4.6% increase. Police costs will also increase, accounting for another 3.13%.
Other factors in play are political uncertainty, more downloading of services on to municipalities from provincial and federal governments without any new funding to pay for them, and labour shortages, she adds.
Maher says staff are looking at options to reduce the overall tax increase next year to 6.4%, and that number does not include any new or enhanced services.
One percent is equivalent to about $425,000 in city revenues or expenses.
Councillor Ron Kerr recommended the city stick to keeping the increase as low as possible and the rest of council was in general agreement. Councillor Ben Lanyon pointing out there are likely a few tough years in the city’s economic future. Councillor Doug Chapman said the local economy will struggle while the logging industry is in a long-term slump, and suggested the city look at the latest economic forecasts during planning. Councillor Susan Sinnott asked for staff to also provide an idea of what it would look like with a zero per cent tax increase.
Staff will report back at a later meeting with more options and information for council to consider.
