Grand Forks residents face a five per cent increases in property taxes and utility rates under a draft plan approved by city council today.
According to a report from chief financial officer Marcus Lebler, the tax increase would work out to an extra $70 for the average household valued at $427,000 and generate another $229,000 for city coffers.
The average homeowner would also pay another $41 for water and sewer, generating another $85,000 in revenue.
The city is further proposing to raise its electrical rates by 3.5 per cent, keeping them “marginally below” FortisBC rates. It would cost the average single-family home another $52 per year and generate an estimated $82,000 for the city.
Any shortfall in the plan would be balanced through city reserves.
The overall budget is worth $22.8 million, including $15 million in operating and $7.8 million in capital.
But councillor Rod Zielinski raised concerns about the city’s payroll costs versus the amount that is collected in property taxes.
He said the city pays $6 million in wages and benefits, which he described as “outrageous” when only $4 million is collected in taxes.
“At some point, that’s going to have to be addressed,” he said. “In any business, I don’t know how you can spend more money than you take in. We have one guaranteed resource and that’s property taxes.
“I would hope it would be a concern to everybody. Until we start tackling that, we’re just going in a death spiral.”
Councillor Christine Thompson said she would agree with Zielinski if the city’s wages were entirely paid for by taxes, but the city has other revenue sources, including utility fees, which help fund those departments.
Zielinski responded that while those fees pay for operating costs, they don’t raise enough to cover capital.
“So the system itself is getting behind each and every year,” he said. “We’re not collecting enough to run those utilities if they were private enterprises.”
Mayor Everett Baker asked Zielinski if he was suggesting a higher tax increase. Zielinski replied that he thinks council needs to “look at the structure of the organization … look at what our services are and what they’re costing us and is there a better way?”
Councillor Deborah Lafleur asked Zielinski which services he would cut. He responded with animal control, saying that he feels that the city is spending too much on the service after assuming responsibility from the Regional District of Kootenay Boundary.
“I don’t think that was a smart business decision,” he said. “It was an added cost that we jumped into.”
Lafleur replied: “Given that you don’t live in the city, you may not have the same concern as city residents about animal control.”
Council approved the draft financial plan, which will be subject to further refinement before it is returned to them next month for additional discussion.
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