Property taxes will be a little lower this year thanks to an injection of $300,000 in surplus money from 2013 towards 2014 tax relief.
City council made the decision Monday night.
“I believe that it’s important to both be looking at the future needs of our community while respecting the ongoing impact of taxes on our current residents. I believe this amendment balances those needs,” said Coun. Tim Osborne, who suggested the change.
The decision was a departure from what council decided last week, when it debated the issue as the standing committee on finance. At that time, it passed a recommendation to put $620,142 of last year’s surplus funds entirely towards the city’s utility reserves.
On Monday councillors changed their minds, putting $320,142 toward the utility reserves and $300,000 towards reducing the 2014 tax rate. City staff hasn’t yet calculated how the change will affect the average tax bill.
Council didn’t debate its earlier recommendation to transfer $469,527 of surplus funds to the stabilization reserve.
“I think it helps reflect the end goal of what we were trying to achieve,” said Coun. Sheena Hughes, agreeing with Osborne’s amendment. She dismissed concerns from staff that there would be a need to make up that lost revenue in 2015 by pointing out the city has a surplus nearly every year.
City manager Patrick Draper said the 2014 surplus is likely to be less because tax revenue would be reduced as a result of the $300,000 injection.
“Our year-end position would be a little tighter,” Draper said. “We do not budget for surpluses.”
Coun. Cam MacKay said it’s just that the rate might appear higher because council will be artificially lowering it this year.
Coun. Cathy Heron was against using $300,000 for reducing the tax rate, noting the increase facing taxpayers is already less than two per cent.
“We have an extreme problem with our utility reserves. We are underfunded on utilities,” she said. “It might not lower the tax rate but it’ll eventually help the utility rates.”
Mayor Nolan Crouse called the decision “straight politics” and agreed with Heron that utilities are underfunded.
“This council in the next three years will see where that comes to roost,” he said.
Heron, Crouse and Coun. Gilles Prefontaine voted against Osborne’s amendment, which was passed by the majority.
The amended motion, which also puts money towards the stabilization reserve, was then passed by a 6-1 vote, with Heron the dissenting vote.
