SUNDRE — Depending on how much the assessed value of their property changed over the last year, local residential property owners might expect to see a modest reduction on the town's tax bill this year.
“It depends on how much the property value has increased compared to how much our rate has changed,” Chris Albert, director of corporate service, told council during the April 11 meeting. “But overall, I would expect to see most properties have a moderate decrease.”.
Providing a recap on the process that leads to the municipality setting its tax rate bylaw, Albert reminded council the 2022-23 budget and 10-year capital plan had been approved in December.
“Our biggest control over this tax rate is at the budgeting stage,” he said.
Passing the budget is the first step toward developing the tax rate bylaw, he said, adding administration must also wait for information including updated assessment values and provincial requisitions before calculating the rate.
“This is about the time that we get all of the information, and we try to get it to council as soon as possible,” he said.
“This more or less wraps up the budgeting process for 2022,” he said, adding administration prefers to have the tax rate approved sooner than later so staff have ample time to create and mail out assessment notices with time to spare so people have plenty of opportunity to pay prior to the June 30 deadline.
On an unrelated note, Albert also said he wanted to highlight the fact 2022-23 marks the end of the municipality’s first four-year budget cycle.
“The four-year cycle that we’ve developed has really helped with the predictability,” he said. “And I think that shows through in this bylaw and in what we’ve done with the mill rates over the last few years.”
Additionally, he wanted to point out that while the provincial government's new cost of policing imposed on municipalities with populations of fewer than 5,000 is not technically a requisition, the municipality nevertheless has no control over that rate.
“Although policing is not a requisition, it is a cost that is imposed on the municipality by outside forces,” he said. “We don’t really have any control over it. But we have managed to do a very good job of absorbing that cost.”
When the 2022-23 budget was approved in December, the operating budget accounted for an estimated year-over-year cash requirement increase of 1.73 per cent, he said.
“Which is actually significantly below CPI — consumer price index,” he said.
The municipality is forecasting a little more than $9 million in total expenditures offset by roughly $5.3 million in total operational revenues, which leaves more than $3.7 million to be raised through taxation, Fortis Franchise Fee, Municipal Sustainability Initiative grant funding, as well as restricted surplus accounts where identified, reads a portion of the background information including in council’s agenda.
The bylaw, Albert explained, is broken down into four sections: the first part outlining required funding and expenditures; the second featuring additional funding and requisitions the municipality cannot influence; the third detailing assessment values broken down by residential and non-residential; and the fourth being the tax rates.
“The proposed rates for 2022 — residential and farmland — would be 7.9918. That’s actually a decrease from last year’s rate of 8.388,” he said, adding that administration’s recommended rate for non-residential is 11.7933, also representing a decrease from 12.378.
Should council decide to consider different rates, the background in council’s agenda states each change of 0.05 in the mill rate would result in a compounding impact of $21,622 on the budget.
To provide council with a better understanding of how the 2022 tax rate bylaw stands to affect some residential properties, Albert calculated several examples.
“I randomly picked four properties with varying values and varying assessment changes from last year to this year,” he said. “I don’t like using the average, because the average changes every year…nobody ever seems to fit in the average anyway.”
Citing the example he calculated and referring specifically to the municipal portion of the tax bill, Albert said the owner of a property valued at $388,000 in 2021 that is now valued at $405,000 would see a decrease of about $17 on the town’s tax bill.
For the owner of a property that was last year valued at $263,000 and has been assessed at a value of $265,000 in 2022, their annual municipal tax bill would go down about $87. And the municipal tax bill for a property valued at $338,000 in 2021 now valued at $342,000 would drop by about $100, while the owner of a property that remained at roughly the same level of assessment value of $156,000, would see a decrease of about $64 this year, he said.
“What I’m hearing is that across the board — generally speaking — most homes have slightly increased in value and most homes have a slight decrease in (municipal) taxes?” asked Coun. Paul Isaac.
“That is correct, yes,” replied Albert.
Coun. Connie Anderson asked how the situation was stacking up on the commercial side of things.
“Commercial is a little harder to speak to,” said Albert. “I did not specifically look at the commercial numbers. But quickly glancing through it, it is in a similar position, as far as I can tell.”
With regards to requisitions the town has no control over, Coun. Owen Petersen inquired if those rates had changed or increased from last year.
“So, might some folks see an increase in their overall tax bill not because of municipal tax, but because of requisitions?” asked Petersen.
“That is a possibility,” said Albert, emphasizing again his presentation pertained only to the municipality’s portion of the overall tax bill.
According to the information outlined in the bylaw, the Alberta School Foundation Fund requisitions for residential/farmland and non-residential are respectively set at 2.6358 and 3.7278, while the Mountain View Seniors’ Housing rate is set at 0.3621.
Those rates actually decreased, but not by much, said Albert, adding that owners of properties that had little to no increase in their assessment value will likely see a decrease in their amount paid to those two requisitions.
“The properties that have higher changes in their assessment, will see less of a benefit,” he said, adding the first example property he cited would quickly see those $17 “get eaten up by the school and seniors housing” requisitions.
The total mill rate for residential and farmland including municipal (7.9918), ASFF (2.6358), MVSH (0.3621) and designated industrial properties (0.0766), is 11.0663. Meanwhile, the total rate for non-residential including municipal (11.7933), ASFF (3.7278), MVSH (0.3621) and designated industrial properties (0.0766), is 15.9598.
Coun. Paul Isaac wanted to know how much the municipality is contributing to policing costs in 2022, and also asked what that amount is set to increase to next year.
Without the details at his fingertips, Albert said the amount allotted for 2022 was about $85,000 and recalled past estimates provided by the province forecasting another substantial increase coming up next year.
“I know it had another big jump in 2023,” he said.
Responding by email to a follow-up question, Albert said information previously reported on remained fairly accurate with the exception of years of payment being pushed back by one. In other words, the municipality paid $56,000 in 2021, $85,000 in 2022, $113,000 in 2023, and $170,000 in both 2024 and 2025, he wrote.
“We have not received any forecast updates since that one in 2020,” he added. "And so far, the numbers are staying close to those estimates.”
Inquiring about the various restricted surplus accounts the municipality is leaning on to reduce dependency on taxes this year, Coun. Todd Dalke asked how close those reserves were to reaching their minimum 25 per cent baseline before needing to be topped off.
“Because we’re utilizing those surpluses going forward, are we expecting a jump for deposits into those surpluses into the next year?” asked Dalke.
“We’re not expecting a large jump in the deposits to those,” said Albert. “For most of them, I would say off the top of my head, we’re not very close to their 25 per cent limit.”
Mayor Richard Warnock praised administration’s commitment to working with council to keep taxes under control in an effort to as much as possible alleviate the tax burden on residents, and the tax rate bylaw was approved after unanimously receiving three readings.
