Town council has moved to raise taxes by three per cent. The decision was made by a 4-2 vote (Coun. Gene Sobolewski was not in attendance) and will create a "balanced budget" according to Mayor Ernie Isley.
Town council has moved to raise taxes by three per cent. The decision was made by a 4-2 vote (Coun. Gene Sobolewski was not in attendance) and will create a "balanced budget" according to Mayor Ernie Isley. The increase is to cover a $164,000 deficit.
Town council discussed the May adjusted operating budget for 2012, as well as the 2012 interim operating budget, while making their decision. After the assessment, council explained the Town's assessment increased by 2.5 per cent.
Council was presented with three tax increase options: zero, three or five per cent, which included different budgets and funding options for each.
"Being one of the first to argue for zero per cent last fall, I am now 100 per cent supportive of the five per cent," said Isely, beginning the meeting.
"I'll admit I was being a little bit naive and I thought by this point in time we would have gotten some equality of treatment with a certain neighbour to the northeast. So I think rather than some council in the future having to really fight to move things, we should be moving up with our normal rate now."
The Mayor said it should be a "significant shock" to the community that taxes will be raised. He stated an increase in taxes would allow for further development and allow the Town to put contributing monies from the MD toward their capital budget as opposed to operating.
Not all councillors were on board though, particularly Coun. Jim Cheverie and Coun. Lorna Storoschuk.
"I would suggest an increase of zero per cent," said Cheverie. "We have substantial growth in industrial, commercial, plus residential throughout the community. That growth brings with it taxation, new taxation, year after year. So with the growth in this community, I think that we have enough new taxes that we do not have to raise taxes.
"Looking at our calendar with the MD and the City of Cold Lake that have not raised taxes, that would then put the Town of Bonnyville at a disadvantage for development. I personally don't want to see a disadvantage to the wealth," Cheverie stated.
He went on to state that the Town's capital budget contributors accounts for about $900,000, plus operating budget of $100,000.
He suggested reducing the operating budget to $50,000, reduce the $900,000 capital contribution to $750,000, which would create a new budget with a surplus of $1,000 with no increase in taxes.
Storoschuk agreed with Cheverie and also stated she thought the assessment was "too high" and the Town is likely to get more taxes than has been estimated. She suggested the Town "stay status quo."
However, Coun. Rene Van Brabant stated he wasn't in favour of a zero per cent increase, while Coun. Ray Provost stated he would "take anything but a zero per cent increase."
Once Mayor Isley called the question, it was councillors Cheverie and Storoschuk who voted in favour of a zero per cent increase, while the remaining councillors voted against it, defeating the motion.
Coun. John Irwin was on the fence in the beginning. He said he felt the Town has not had much residential development and that if taxes were raised, "there won't be any."
Isley spoke against Cheverie's motion and compared the Town with the City of Cold Lake, the Town's "main competition."
"I believe with the five per cent increase, which gives us a little more flexibility to do things, our mill rate will be 6.24 per cent. It's a slight move up," said Isley. "Cold Lake's is still going to be 7.145 per cent for residential."
He stated their multi-tax rate is lower, at 6.8 and their commercial rate is 12.34. He also said with the five per cent increase for the Town, the Town's commercial rate declines from 8.92 per cent last year to 8.75 per cent this year.
Isley said the Town's only major competition with the MD is for non-residential, which increased for the MD this year.
"I think we're still in a very healthy position," said Isley. "While our mill rate is at 8.7915...it leaves us at a very competitive position and I don't think we can hold people on long term by keeping it at zero."
However, Cheverie felt that with an increase in assessment, there would already be a sufficient increase in tax money coming in without having to increase taxes.
"The assessment increases and the taxes associated, plus the growth in all of our industrial residential is sufficient for us to have a zero increase," he said.
"We have sufficient funding coming from the tax payers with the new assessment and I do not believe a tax increase is required and if we look toward a tax increase then there's something wrong with our managing of our taxes."
Prevost pushed for the three per cent increase, stating he had "mixed feelings" about both the zero and the five per cent increase,
"When you look at the big picture, from five per cent tax increase to a zero per cent tax increase, the actual net dollars that we get out of that is about $294,000. It's not a whole lot of money," said Prevost.
"Having said that, I've always thought you're not overly progressive if you have a zero per cent tax increase because nothing stays at zero," he said. "And I think five sends the wrong message."
Isley said increasing taxes would create a more balanced budget and allow for further development.
"I think unless we keep increasing cash flow a bit every year, it's going to come back to haunt us," he said. "I might be able to find a compromise somewhere between zero and five."
Van Brabant moved that council increase taxes by three per cent, which Isley stated "does generate a balanced budget" with the assessment increase of 2.5 per cent.
It was again a vote of 4-2, this time in favour of the motion, with Storoschuk and Cheverie opposed. The motion was carried.
With a three per cent tax dollar increase, this results in a tax rate increase of 3.53 per cent for residential properties and a decrease of 2.14 per cent for commercial properties.
It provides a surplus of $12,601, which would decrease the funds being used from the Regional Development Funding from the MD and as such, these funds can be contributed to capital projects according the request for decision document provided on May 8, during the council meeting.
