St. Albertan homeowners will pay about $25 more in municipal taxes next year for an average $450,000 home, while commercial owners will pay about $72 more for the average $1 million property.
On Monday, St. Albert city council passed its 2021 budget. The budget includes $112 million for operations next year, a $2.1-million increase over last year's budget. On the capital side, St. Albert is budgeting to spend $61.8 million to repair, maintain and replace city assets and fund new capital growth projects.
This year's tax increase, which comes in at 0.7 per cent, is being used to maintain service levels not directly impacted by COVID-19, and includes a second year of a 1.5-per-cent tax increase to stay on top of maintaining city infrastructure.
Mayor Cathy Heron said there wasn't a lot of appetite in the community to cut back service levels like snow clearing or lawn mowing to reach a lower tax rate. Council also decided next year isn't the year to cut $300,000 in funding for preventive social service programs funded under Family and Community Support Services (FCSS), as more people face financial, mental and physical challenges as a result of the pandemic.
"I think St. Albertans firmly believe that they want value for their tax dollars, and they're willing to pay for it," she said.
According to a community engagement survey earlier this year, about 60 per cent of respondents said they were willing to accept a tax increase of some sort. Thirty-nine per cent said they would only accept a zero-per-cent increase.
The city would have needed a 3.5-per-cent tax increase to cover expenses, but a one-time application of $2 million in reserve funding reduced that to 1.1 per cent. Council would have had to find about $1 million in either new revenues or cut expenses to eliminate it completely. In the end, councillors whittled the tax increase down to 0.7 per cent by chopping $220,000 for public art and $100,000 for traffic calming.
Utility rates will see a slight dip next year by about 40 cents, with a typical monthly utility bill of $133.04. Utility capital projects total $19.5 million.
The electrical franchise fee rate will increase by 2.5 per cent to 10 per cent on Jan. 1, generating an estimated $768,000 for city coffers. Residents and business owners will see this charge reflected in their utility bills, with larger consumers of electricity paying more.
Heron said administration and council did a good job of finding ways to reduce the tax impact on residents this year in conjunction with the city's ongoing fiscal and operational review, but many solutions are short-term.
"Finding efficiencies is not the solution to municipal sustainability going into the future," Heron said. "The solution is a combination of efficiencies and finding new revenue. And that revenue should not come from taxes all the time – it needs to come from other non-traditional sources."
The province has given municipalities "tools" to generate new revenues, like establishing a city-controlled corporation, Heron said. On Monday, council voted 6-1 (Coun. Sheena Hughes against) to spend up to $75,000 from the stabilization reserve on a feasibility study for a municipal energy corporation.
"If you don't take advantage of that, you're stealing from residents," she said.
The approved 2021 budget will be posted to https://stalbert.ca/cosa/finance/ early next year.