Council has approved tax rates for 2019, and they are a-shifting. But which way remains to be seen.
At the March 9 Council meeting, the proposal from staff was to see residential tax rates—which have rarely changed over the last number of years—go up seven percent overall. (Rather than look at mill rate, the District discussions revolved around percentage change from last year. If the average property owner paid $100 last year, they would likely pay $107 this year, regardless of the actual value of their property.). However, after much debate, that number was dropped to three percent.
Councillor Will Howe opposed the proposal, arguing for zero percent across the board, but this proposal was defeated, with Council instead moving to increase taxes by two percent for business, three percent for residential and four percent for light industrial.
That was, however, two weeks ago.
At the most recent meeting of council, Councillor Howe tabled a motion (which will be debated at some time in the future, most likely the April 6 meeting, though the agenda has not been prepared yet).
“We are constantly hearing the phases ‘unprecedented times call for unprecedented measures’ and ‘we are in uncharted territory here’, said Howe, reading from a prepared statement. “We have an opportunity as a Council to come together and truly do something that will benefit all residents and businesses in Tumbler Ridge.”
He says in light of the recent events around Covid 19 and the “monumental decrease in local business traffic due in part to businesses being required to follow a mandatory government enforced shut downs, the ever deteriorating economy effecting people’s savings, retirement, layoffs, job prospects, slowdown, and no foreseeable end in site,” the District should be cutting taxes, not raising them.
He proposes that Council pass a one-time 50 percent decrease for residential tax payers for the 2020 budget, as well as a 100 percent decrease in business taxes.
“This will represent roughly $500,000 in savings for our businesses, and $600,000 in savings for our residents,” he says.
With the District on lock-down for the foreseeable future, he says the District will need less money to operate. “With the closure of all our public facilities, and no need for casual/part time employees, and therefore less need for tax money, and knowing that we have considerable $25 million dollars plus in savings, and an estimated 3.8 million dollars in surplus, and our savings in mandated to be invested in 100 percent secure investments, of which we made over $650,000 in interest in 2019,” he says now is the time to act.
“We have an opportunity as a council to come together and truly do something that will benefit all residents and businesses in Tumbler Ridge.”
This would effectively reduce every residential tax payers bill in half and completely eliminate all business taxes in the DTR for a period of one year.
“This will take courage, this will take vision, this will take a monumental leap ahead of all others, but most importantly, this will take leadership.”
The motion would require Council reversing their previous decision on tax rates.
The District has a budgeted surplus of slightly more than $1-million for this year, but this, says CAO Jordan Wall, is not taking into account depreciation for things like municipal buildings. Factoring in depreciation is something the District has been moving towards over the last number of years. Rather than wait until the infrastructure in town (water and sewer, District Vehicles and Buildings, roads) falls apart before budgeting for the repairs, the District is starting to set aside money each year for the inevitable replacement. While this year there is a $1.2 million surplus, next year, as the rest of the District assets come online, that surplus will actually be a deficit.
“One part of this process is to make sure that the organization makes a yearly transfer to reserve, equal to the amount of depreciation of its assets,” says Wall. “The District has allocated this for its vehicles, roads, and airport currently and is in the process of doing the same on its buildings and in ground infrastructure.”
“Administration has recommended all tax classes in this report [incur] a 2 percent inflationary increase,” writes Jordan Wall in his recommendations to Council. “In addition to this the residential and business tax classes, which have largely seen decreases have an additional 5 percent increase recommended. The suggested increase would move Tumbler Ridge’s total tax burden on a representative house to approximately $2,012. This would—in 2019—represent the eleventh lowest tax burden of the over 160 municipalities in BC.”
Wall says that, as they calculate how much value is being lost through depreciation, the amount needed to cover this annually over the next few years will rise. “It is growing more likely that the total deprecation savings costs required to completely fund asset deprecation in the District will require some combination of service level/spending decreases and increases in revenue. The recommendation contained in this report would start a gradual process of bringing Tumbler Ridge’s taxes more in line with industry standards.”
At the time of the initial debate. Mayor Keith Bertrand says that now is not the time to increase taxes. “Globally, we are seeing mass hysteria that will affect economy significantly,” he says. “I’m not in favour of increasing taxes at this time, for residents or business.”
That said, he understands that inflation is still an issue. “I could live with two percent across the board,” he says. “Seven percent is a significant increase. I don’t see the need to collect that kind of money at this time. I know we are going through asset management, but I believe a lot of our reserves can be allocated.”
He says he prefers not to comment on Howe’s proposal until it appears before council.
At the time of the initial debate, Councillor Norbury iswasin favour of a higher rate increase. “We are putting ourselves at a big risk by not increasing our residential tax rate,” he says. “By not doing that, we are giving our residents a two percent break. I think it’s reasonable to increase our residential taxes. I don’t think the residents should be bearing the brunt of the taxes, but we see that a 2 percent increase is actually a decrease.”
Councillor Miedzinski was also in favour of the original numbers. “We are the eleventh lowest residential tax rate in the province,” he says. “If we were to go up seven percent, we’d still have one of the lowest.”
After a long discussion, council agreed on a three percent increase to residential taxes, four percent for light industry. All other rates remained the same, though if Councillor Howe’s proposal does go through, this could change.
Last year, Council approved a 12 decrease in the Major Industry tax collection as compared to 2018, while the light industry rate collection went up 3.97.
