City council officially introduced its proposed 2022 operating budget calling for a 5.52 per cent tax increase last week. (Black Press Media file photo)

City council officially introduced its proposed 2022 operating budget calling for a 5.52 per cent tax increase last week. (Black Press Media file photo)

City of Terrace proposed budget hike out for public comment

Property tax increase of 5.52 per cent wanted

City council officially introduced its proposed 2022 operating budget calling for a 5.52 per cent tax increase this week, opening the door for public comment leading to an expected final document next month.

That increase is to raise $865,528 toward an anticipated 2022 spend of $16.644 million, a figure city officials say is necessary to maintain existing services.

Total expense increases are pegged at $1.196 million, which is $331,293 more than what the tax boost is to bring in. But taxation from new construction, additional building permit and licence revenue, grants in lieu of taxes and other miscellaneous sources are expected to close the gap.

Information provided to council indicates the 5.52 per cent works out to $94.40 for an average home valued at $383,306 but how the increase will eventually be reflected will depend upon an average home’s increased or decreased assessment for next year.

And that $94.40 figure does not include taxes from other public sector parties such as the school district and regional hospital district nor does it include scheduled increases in water and sewer rates.

Big ticket items within the 5.52 per cent increase include $320,775 in wage increases for the city’s unionized workforce (including firefighters), $150,000 toward an eventual substantial wage increase for RCMP officers, and $156,780 for the first year of what will be an ongoing annual tax increase to build up the city’s bank account for capital projects.

“In efforts to keep tax increases low, the funds once used for capital purposes were reallocated to operations to offset operational increases,” Lori Greenlaw, city finance director, indicated in a memo to council of past practices in outlining the need for a specific tax hike for capital spending.

“The cumulative effects of these ongoing transfers will allow us to fund a portion of our capital requirements once again,” she noted of the tax increase plan for the next five years.

A further $65,965 has been added to the account maintained to purchase new vehicles as required.

And $10,000 has been included for a flower basket program, a city service that when council tried to cut several years ago resulted in protests.

City council members, during an Oct. 7 first discussion of the budget did note the impact the proposed hike would have on residents and businesses.

But mayor Carol Leclerc and councillor Sean Bujtas said the proposed tax increase should be looked at in context of previous budget years.

“I know a 5.52 per cent increase is painful but if you average it out over 10 years we’re looking at 2.3 per cent a year,” said Bujtas.

“It continues to prove how fiscally prudent our community is compared to some other communities.”

A chart provided by Greenlaw indicated that over the past 10 years, two of those years — 2015 and 2016 — had no increases at all with four years having a two per cent increase, one year a 2.5 per cent hike and one year a three per cent hike. The rate started climbing in 2020 at four per cent and this year at 5.48 per cent.

Two firefighters, an RCMP officer, a bylaw officer, a public works manager and an engineering technologist have added to expenses, Greenlaw said.

Not included in this year’s proposed budget but which is expected to surface in 2022 is the cost of health and safety measures within city operations.

“We need to address overall safety standards across the organization and coordinate activities, policies and procedures,” Greenlaw said in her budget memo.

But how much that will cost and what kind of hiring commitment might be needed won’t be known for some time.

In previous budget discussions about water and sewer rates, Leclerc did note that senior citizens might be affected by rising costs.

The province does have a program in which qualifying people can borrow money at a low interest rate to pay their property taxes each year. Repayment occurs from the sale of the property at the time it changes hands.

This program, however, does not apply to utilities.

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