Following indecision regarding whether to increase the municipality's commercial and residential mill rates, Sundre's council decided during last week's regular meeting to table the matter.
Following indecision regarding whether to increase the municipality's commercial and residential mill rates, Sundre's council decided during last week's regular meeting to table the matter.
Based on a previous discussion at council's May 1 workshop, administrative staff had compiled three options with a main recommendation for elected officials to consider.
Vic Pirie, director of finance and administration, outlined in his report that the majority of council during that workshop had indicated a preference for a three per cent increase to the residential and commercial mill rates with a reduction in the commercial vacant mill rate to 13 from 15.
The residential mill rate set by the Town of Sundre in 2016 was 7.740, but added up to 10.349 once the provincially charged Alberta School Foundation Fund (ASFF) and the Mountain View Seniors' Housing (MVSH) rates were factored in. The municipally set commercial rate was 11.421, but added up to 15.293 with the ASFF and MVSH rates.
The alternative favoured by the minority of council was for a one per cent increase in the residential and commercial mill rates and to equalize the commercial vacant mill rate with the non-residential mill rate, Pirie's report stated.
Administration's recommendation was to pass a tax rate bylaw that incorporates a three per cent increase over the 2016 residential and commercial mill rates, and to equalize the vacant commercial rates with the commercial rates. An average residential property in Sundre with an assessed value of about $224,000 would see its tax bill increase about $52 a year, he said.
The director of finance also reminded council that both residential and commercial assessments in 2016 not only did not increase as anticipated, but that they actually dropped, having a negative impact on the amount of funds generated through tax revenue. So even with a three per cent increase to the residential mill rate, the municipality would generate about $33,000 less income than estimated in the approved 2017 budget. Lowering taxes any further would create an even larger shortfall, he said.
"A zero per cent increase in the mill rate would put the town behind."
However, Pirie also painted a more optimistic side of the picture by pointing out that council had successfully increased the municipality's reserves to the tune of about $5.6 million today from about $3 million in 2013.
While other neighbouring communities such as Didsbury and Cremona did not increase their mill rates this year, those municipalities experienced growth in their assessments, which translates to additional revenue without increasing taxes. Carstairs was even able to reduce its mill rate after seeing its assessments go up significantly, he said.
"If our assessments grew five per cent, we'd be in a position to lower our mill rate too."
Moving forward, Sundre faces the possibility of flat assessments — or even another drop — which should be taken into consideration, hence administration's recommendation, he said.
Citing the fact that council nearly doubled the amount of funds available in reserves since 2013, Mayor Terry Leslie implored his colleagues to consider approving a zero per cent increase, and opened the floor for discussion.
Coun. Cheri Funke, who attended that part of the meeting by telephone call, felt the reserves that have been built up should remain allocated for their original purposes. So the councillor put on the table a motion to increase the residential and commercial mill rates by three per cent while dropping the vacant business mill rate.
Coun. Paul Isaac said he would love to see a zero per cent increase, but expressed concern at the potential for another year of stagnant assessment values.
Coun. Chris Vardas was also in favour of Funke's motion. The future is unpredictable, he said, and council cannot rely indefinitely on surpluses.
"We got very big projects coming up for infrastructure. One day, we'll have to have something there to pay for them," he said.
Coun. Nolan Blatchford agreed.
"We're always promoting getting more development," he said, adding the wastewater treatment facility's capacity limitations will hamper future growth until those upgrades are complete.
"That projected date to fix it should be moved ahead. If we don't get regional designation (to obtain grant funding) on that lagoon, we're pretty much done with — it's a ton of money to spend on that thing."
But Coun. Myron Thompson, who said he would support whatever course of action council chooses, was strongly opposed to the motion. There are residents on limited incomes whose budgets don't even allow them to go for the occasional night out, and the municipality should share in making cost-cutting sacrifices during hard economic times, he said.
The mayor said striking a balance between putting money away for the future and not taxing too much today is a real struggle, but nevertheless felt council has been responsibly putting reserves aside.
"I urge council to defeat the three per cent (tax increase)," he said.
The tax rate bylaw required three readings before being passed. In order to provide residents with a six-week heads-up, Pirie told council the tax rate should be approved at the meeting to allow administration enough time to process tax notices and send them out.
The first reading passed with councillors Vardas, Funke, Isaac and Blatchford in favour, while Leslie, Thompson and Coun. Verna McFadden were opposed.
But the bylaw failed to make it through its second reading after Isaac pushed for a compromise and put on the table a motion to increase the residential and commercial mill rates by 2.5 per cent.
However, Pirie said the bylaw must have the specific figures approved by council and that administration would therefore have to calculate the new rates to update the bylaw before it could be given final readings. That would mean arranging a special council meeting to give staff time to update the bylaw and present to council.
Council carried Funke's motion to table the bylaw, and a special meeting to approve the tax bylaw was scheduled for Thursday, May 11. Click here for that story.
