LAC LA BICHE - A $45 million oversight when calculating the assessment values of properties in Lac La Biche County has resulted in a slightly higher than expected increase in municipal taxes — but it remains a nominal increase, say councillors.
The multi-million dollar mistake was spotted by administrators following an April 11 council meeting where elected-officials had agreed to pursue a 2023 tax formula that would see a three per cent increase in the municipal tax rate in all residential properties, a one per cent municipal increase in non-residential and industrial properties in the rural service area, and no change to commercial rates for businesses in the urban areas. At the time, that scenario was said to generate an expected $70.57 million in municipal tax revenues.
The error, something municipal officials say was generated at the Provincial Assessor's Office, resulted in a $45 million reduction in what had been a $1.3 Billion assessment of pipelines within the municipality. The mistake carried an $850,000 — real-money, negative impact on the projected tax revenues. To make up for the error, Lac La Biche County councillors voted last week to increase tax rates slightly more.
Homes up, industry up
When municipal residents received their 2023 tax notices that will be mailed out on May 19, the new tax rate will see a four percent increase in municipal rates for residential properties and a two per cent increase for industrial taxpayers. Municipal tax rates for businesses operating within urban areas will remain the same as last year. Due to a year-over-year increase in property assessment throughout the municipality of between two and eight percent, most residents can expect to see a slight increase on their overall tax bill.
The new, adjusted municipal rates are anticipated to generate tax revenues of $70.39 million. Operating expenses for 2023 are budgeted at $63 million and new capital spending projects total $42 million.
“Even with the small increase in residential taxes, our residents enjoy some of the best municipal programs and services in the province at a low cost,” says Mayor Paul Reutov. “With major projects like the Main Street Lac La Biche Revitalization Project, McArthur Park redevelopment, the aquatics centre, new lift stations in Plamondon, and our ongoing support for rural community groups and halls, exciting changes are coming to our community that will make living, working, and investing here even more rewarding."
According to financial guides released by the municipality, an average home in Lac La Biche's Dumasfield neighbourhood is assessed this year at about $329,000, up from $326,000 in 2022. With the new municipal tax rates, along with school and seniors tax requisitions, that average home will see a tax notice of $1,957 this year, up from $1,918 last year. According to the same document, average home in the Plamondon hamlet has increased in value from $408,000 in 2022 to $415,000 this year, taking the average tax levy to $2,470 for the year, up $65 from 2022. A pipeline pump-station in the rural service area of the municipality that has an assessed value this year of $10.9 million will generate $217,000 in taxes for the municipality in 2023, up $16,000 from 2022. An average retail store in Lac La Biche will continue to pay about $10,000 this year in property taxes.
Trying to get to 5:1
While council had to adjust for the assessment error, municipal officials must also work within a funding formula to narrow the distance between residential and industrial tax rates to a 5:1 ratio. Going into the 2023 tax deliberations, that ratio was at 5.89:1. Since 2016, when the difference was a 7:1 ratio, the provincial government has urged the municipality to get down to a 5:1 difference. So far, the requests have not been demanded, and no timeline has been ordered — but council is wary of the eventual demand. The new tax bylaw will see the ratio between residential and industrial rates for 2023 drop to 5.77:1.
"Our hands were tied in two scenarios here," said councillor Lorin Tkachuk.
Despite the slight increases, councillors say they remain committed to highlighting the region for economic growth. The decision to hold the line on municipal tax rates for local businesses is an indication of that, says the mayor.
"Council and I are also continuing to seek ways to support existing businesses and attract new ones," he said.
Tax payments are due June 30. The municipality will apply a five percent penalty on all outstanding balances as of July 1. A further seven penalty will apply after Nov. 16.