City Council made its budgeted 5.5 per cent 2014 tax increase official Monday by passing the 2014 Mill Rate Bylaw.
Lonnie Kaal, director of finance, explained that per the budget Council passed in November, the City needed to one per cent more for general revenues and 4.5 per cent for capital works from both residential and commercial rate payers and a further 1.7 per cent to fund a $300,000 loss in revenue from a 2013 adjustment of commercial property assessments.
Higher than expected commercial growth, however— largely due to the addition of LDM Foods to the tax base—offset this requirement making the actual tax increase six per cent. This was further reduced to the 5.5 per cent when the Province decided to freeze school tax increases for a second year.
“The Province has helped us out in that regard because we used to see increases in that area all the time and, of course, it all gets passed on to the public and at the end of the day your local taxpayer is going to pay so when the Province can hold the line, it means it’s not adding to what we have to do with infrastructure,” said Mayor Bob Maloney. “I can promise what local residents will see in the not too distant future is Council talking about what we’re doing, why we’re doing it, the cost of infrastructure and the need to go ahead with it whether or not we have participation from the Province or the federal government. When Broadway was originally built 70 per cent or more of that money came from the federal government. That kind of money just isn’t available to us anymore and if that’s the way things are being done now, then we have to deal with it and move forward.”
Of course, the bottom line is always what it means to resident’s bank accounts. On an average dwelling in Yorkton, which is currently assessed at $186,444, a homeowner can expect to pay $88 more this year or $7.30 per month. The commercial equivalent is $240 and $20. Owners of high density residences (buildings with more than eight units), a new dwelling class of created last year, pay 90 per cent of the residential rate.
“When people are looking at these increases, I think they have to take it in the context of the work that’s being done,” Maloney said. “The City has taken a tone some years ago of replacing infrastructure and I think that’s where most cities in the province are right now and where most of these dollars will be going.
“I think for the residents it means there’s a commitment on behalf of Council to make sure streets and roads are repaired and that the underpinnings, basically your water and sewer mains are being replaced. We heard a report tonight about our Dracup project and I think it just re-emphasizes that investments are being made to avoid the flooding that happened in 2010, for example, and I think the community has spoken on their want and need for flood protection and that’s something that Council has heard loud and clear.”
In her presentation, Kaal noted it is working showing in a tidy pie-chart graphic based on a loonie that 13.9 cents of every tax dollar is now dedicated to capital projects, the third biggest chunk of the pie, which she said, is a “significant increase.” She intends to use the graphic in public communications on how City Hall is spending tax payers’ money.
The biggest slice of the loonie is still Public Works (streets, street lights, traffic control, sidewalks, drainage, snow removal etc.) at 16.7 per cent followed by RCMP (14.7 per cent).
In another graphic, a bar graph of the ratio of taxes paid by commercial enterprises versus residential owners, Kaal explained Yorkton has climbed to second place among the cities in the province at a ratio of 2.8 next to Prince Albert at 3.5. Moose Jaw has the lowest at just 1.4.
Part of it is the tax rate, which Kaal admitted is comparatively high, but Kaal said you can’t look at those numbers in a vacuum.
“Tax policy must look at the makeup of the city’s tax base,” she said. She noted, for example, the agricultural tax base in Yorkton is nominal, but the commercial sector is on the rise. The report that accompanied the bylaw indicated that residential rate payers provided 54 per cent and businesses 46 per cent of tax revenues in 2013. In 2014, it will be 52 and 48 per cent respectively.
Although Council is concerned about the commercial tax rate and ratio in Yorkton, councillor James Wilson suggested that research has shown it is not usually the primary consideration of businesses in determining where to locate and that the City is competitive with the services it provides.
Still, the mayor said it is an important issue.
“We want to be a place that’s competitive for business and it’s difficult when we’re seeing a skew from residential to commercial,” he said. “We want to make sure that we can keep those close; we’re trying to work towards that, but I guess our reality is expenses are going up, our cost of asphalt, for example, going up 30 per cent a year and our increases in taxes just aren’t keeping pace with that and so you’re left, I guess, between a rock and a hard place and making those kinds of decisions.
Council passed first and second readings of the Mill Rates Bylaw unanimously then accepted a motion to proceed to third reading and made the bill law.