District of Hope staff present the budget on March 8.

District of Hope staff present the budget on March 8.

Draft budget sets 2.15% tax revenue increase

Budget still had a deficit of about $471,000 on March 8.

At the March 8 District of Hope budget meeting, finance director Dale Courtice presented a draft budget that council will amend over the next few Wednesdays.

The draft budget proposes a 2.15 per cent tax revenue increase, to raise $158,400, and also lowering the residential tax rate from 6.48 to 5.24 per cent and business tax rate from 15.3 to 14.2 per cent.

Courtice also gave two other tax revenue increase examples, set at 3.35 and 4.75 per cent, which will raise $247,000 and $350,400 respectively to see what effect it would have on the budget.

A drop in residential tax rate does not mean that everyone will see a cut in property taxes, as the average residential assessment went up 27 per cent. The residential tax rate change from 6.48 to 5.24 per cent represents a 19 per cent drop.

Courtice also presented two other residential tax rate examples, all of which are lower than this year’s 6.48 per cent tax rate. His two other scenarios put the residential tax rates at 5.32 and 5.41 per cent.

Courtice picked a few sample properties to illustrate this.

A property which saw a 26.5 per cent increase in assessment value — just below the average assessment increase — will pay more at all three tax rates. A property with a 9.69 per cent increase will see a fall at all tax rates. However, a property with a 20.9 per cent increase will see reductions in taxes at all but the 5.41 per cent tax rate.

The District is also proposing to reduce the business tax rate from 15.3 to 14.2 and gave two other example rates, at 14.4 and 14.65 per cent. Business valuation went up by 8.6 per cent.

Hence, a business with a valuation increase of 7.84 per cent will pay more in all three scenarios (although only $8 more at the proposed 14.2 per cent tax rate), while a business with a 4.95 per cent increase in value will see a decrease in all but the 14.65 tax rate.

The District will spend $6.167 million in its capital budget, including $2.22 million on roads. The biggest expense, at $1.2 million, is to execute the pavement management plan as recommended by engineer Alan Reggin, who presented to council on Nov. 14.

Reggin noted that $1.5 million per year is needed for roads to improve by 2026, whereas $1 million is the point where roads will hold its status quo.

Othello Road will get a separate $600,000 for engineering and repairs.

An item that will stir discussion is the $259,000 purchase of a five-tonne dump truck, which promises to cut maintenance expenses by $35,000 on another vehicle. The District has $107,000 budgeted to help pay for the new truck from last year’s sale of public works assets.

Mayor Wilfried Vicktor aired his suspicions on the $35,000 figure, saying that the figure might only be a one-time expense to get that vehicle into a good state of repair.

“It obviously wouldn’t be $35,000 per year to maintain a dump truck. That’s not a realistic number,” said Vicktor, adding he would like to explore other avenues including leasing or auctions to get a replacement.

More details were revealed by operations director Kevin Dicken at the budget meeting following this one.

The only number provided for the Station House project is a $70,000 balance of architectural design and project costing expenses. Chief administrative officer John Fortoloczky said they do not have the costs but will update council when that comes in.

Fortoloczky added that when Kinder Morgan starts its Trans Mountain Expansion Project, Hope will receive $500,000, and Station House could benefit from it. The District will need to regularly report on the progress of the Station House to Kinder Morgan.

The general fund deficit currently has a deficit of about $471,000. Municipalities must have a balanced budget, hence council must find a way to reduce this to zero, which can include removing expenses deemed optional.

Some expenses considered “nice-to-haves” by Fortoloczky include a $13,000 multipurpose welder and $9,000 in park furniture for Memorial Park.

Read the new developments of the second budget meeting in the March 23 edition of The Standard.