An attempt to lower taxpayers’ contributions to municipal capital projects has been delayed.
A motion that would have used grant money currently going toward utility capital projects to lower what the city calls its capital funding formula – the pot of money used to pay for municipal capital projects – was postponed on Tuesday at council’s standing committee of the whole meeting.
The postponement was led by the mayor, who said he wanted to consider the reduction of the capital funding formula in context to the 2016 budget among other factors.
Coun. Sheena Hughes had wanted to proceed with lowering the capital funding formula by $702,100 each year from 2016 through to 2020.
Council has decided to phase out the use of that money for utility capital projects and put it back toward municipal capital projects.
Director of finance and utilities Diane McMordie cautioned against reducing the amount put toward the capital funding formula each year. The amount has been set at $12.4-million since 2010 and McMordie said administration could potentially be asking to increase that amount at budget time.
There’s a concern that the city is facing an infrastructure deficit in the coming years and reducing the capital pot further would put further stress on the funds. The report to council suggested the current 10-year capital plan could call for as much as $83-million in 2021.
Hughes was frustrated at the resistance to lowering taxes via the proposed capital funding formula reduction to help compensate for the increase to utility fees.
“What frightens me is we’ve now increased the utilities … and now discussing further tax increases of what looks like an almost endless amount,” Hughes said.
A report said reducing the capital funding formula $702,100 each year for the next five years would result in an approximately 0.78 per cent tax decrease per year, if everything else was equal.
The majority of council voted for the postponement. They did not vote against the idea of lowering taxes, but voiced a desire to consider the motion in context of other factors.
Coun. Cathy Heron said they’d wanted to lower municipal taxes by injecting those funds back into the capital pot, “but we need to look at the broader picture.”
Coun. Tim Osborne noted there are some other factors that should be considered. The upcoming facilities matrix, a system that will be used to help make decisions about the 10-year capital plan, will be coming online soon and he thinks the results should be part of the capital funding formula decision.
Mayor Nolan Crouse also listed the facilities matrix as a reason to delay, along with a desire to see the budget and the results of some updates to the budget guiding principles before making a decision about reducing the capital funding formula.
He also pointed out a new councillor will be joining them after the June 24 byelection and should have an opportunity to weigh in.
