BONNYVILLE – On May 11, the MD of Bonnyville council gave the first, second and third readings to its 2022 Tax Rate Bylaw.
The bylaw included one significant change, an increase to the municipality’s residential mill rate, which went from the previous mill rate of 2.7663, to rate of 2.90. This represents a 4.8 per cent increase in comparison to last year’s residential tax rate for MD residents.
A dollar impact analysis of this increase, provided by the municipality’s administration, indicates that ratepayers could see roughly a $67 increase in the municipal portion of a residential tax notice based off a property assessed at $500,000.
Farmland, commercial, business and industrial properties will remain at the same rates set in 2020.
Depending on individual property assessments, properties that fall under these categories may see a slight increase or decrease in their taxes compared to last year.
MD property assessments
Overall, properties within the municipality stayed fairly consistent between the 2020 assessments and last year's assessments.
Residential properties in the MD saw roughly $100 million gain in assessments, rising from $1.63 billion to $1.73 billion.
Assessments for farmland dropped $100,000 between 2020 and 2021.
Subcategories for non-residential properties remained fairly consistent across the board with one exception – small business assessments.
Between 2020 and 2021, the assessments for small businesses in the MD dropped by $32 million. In 2020, small businesses were assessed at more than $75 million. Last year’s assessments of small business properties came in just over $43 million.
Lakeland This Week did not receive an assessment review or explanation for the significant drop in small business assessments by MD administration as of press deadline.
The MD saw a slight increase in assessments for vacant properties and other ‘non-linear property,’ while ‘linear property’ saw a slight decrease.
Linking residential and non-residential mill rates
The reason for the increase in residential tax rates for the municipality is based on the Government of Alberta’s amendment to the Municipal Government Act (MGA) that requires municipalities to link residential to non-residential tax rates.
The MGA has been amended so that the highest non-residential tax rate can be no more than five times the lowest residential tax rate. Within a set 5:1 ratio, municipalities will continue to be able to set their own tax rates.
At the April 20 Committee of the Whole meeting, council reviewed and discussed the requirement from Alberta Municipal Affairs to comply with the 5:1 tax ratio.
Administration presented three tax rate scenarios and the committee approved the recommendation of a municipal tax rate which establishes a 5:1 non-residential to residential tax ratio using the 2021 non-residential rate.
Previously, the MD of Bonnyville tax rates were considered ‘non-conforming’ to provincial legislation.
Since the requirement came into effect on May 31, 2016, non-conforming municipalities have been required to reduce their ratio over time in accordance with the amendment.
Prior to the amendments of the MGA, there was no limitation on the extent to which a municipality’s rates could differ for the taxation of non-residential and residential property.
Now, if a non-conforming municipality has a tax ratio that is less than the tax ratio it had previously, but is still greater than 5:1, it cannot, in any subsequent year, have a tax ratio that is greater than its new tax ratio, according to the MGA.
It was strongly recommended by CAO Al Hoggan that the council approve a tax rate that would be in line with provincial standards.
The mill rate for farmland remains at 5.0, vacant non-residential land will remain at 14.5, small business remains at 11.6, other non-residential property will stay at 14.5, as well as machinery and equipment property.
Mill rates for properties within the annexed ID 349 will stay at 10.15.
Provincial requisitions
The MD must collect requisitions on behalf of the province for seniors housing and education.
Compared to last year, the municipality has seen a slight dip in the Alberta School Foundation Fund (ASFF) contributions which have been set at $16.6 million.
However, the municipality’s contribution to seniors housing has increased significantly with the addition of the Greater North Foundation requisition of $591,322 payable to the province, as well as a slight increase to the Seniors Foundation for a total of $381,021.
Total expenses
At the time the mill rates were approved on May 2, administration estimated roughly $161 million of municipal expenditures and transfers would be carried out in 2022.
The municipality's revenues and transfers from all sources other than taxation were estimated to come in at roughly $82.1 million. This left a balance of $79.2 million to be raised by general municipal taxation.
“The draft budget passed in (December) did not specifically contemplate taxes as part of the budget,” Reeve Barry Kalinski told Lakeland This Week.
“The tax rate was set recently to confirm our annual revenue and the final budget... That final budget will incorporate, as a part of the MD revenue (and) the new taxes as determined by the new mill rate.”
Based on the mill rate, the municipality can expect to collect roughly $82.7 million in property taxes for 2022.
Final 2022 budgets approved
Following the passing of the mill rate, the MD of Bonnyville’s approved its final 2022 operating and capital budget on May 25, which was $4.74 million more than what was previously anticipated.
The municipality's final 2022 operating and capital budget was approved at a combined amount of $166,060,902. The budgets incorporated the newly passed tax rate bylaw as well as previously unbudgeted expenditures.
The operating budget is set at just over $115 million while roughly $50 million has been approved for the municipality's capital budget.
The previously unbudgeted expenditures include a salary for a new Economic Development Officer position, additional funds to cover increased policing costs, and a general increase to cover the cost of rising material prices such as fuel.
