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Mayor’s Report

mayors report

BUDGET 2016

Developing a budget and financial plan — and then setting property tax rates — is quite a complex process.

First, we need to decide all the things that we must do (provide services like sewage treatment and clean water), and then the things that should be done (road and sidewalk repairs), while taking into account the things the public wants us to do (or not do) and while being very mindful about property taxes. We also need to factor in the budgets of two other agencies — the Ladysmith RCMP Detachment and our share of the Vancouver Island Regional Library. They set their budgets, which are then added to our own municipal budget for an overall budget for the year.

Right at the start of the 2016 budget process last fall, council directed that any municipal budget increase should be no more than two per cent over last year’s budget. In January, staff presented a preliminary budget of just over $6.5 million. This represented an increase of 2.17 per cent or $138,123 over 2015. It was based on maintaining existing service levels and included a number of capital projects, such as completing the Waste Water Treatment Plant, upgrades to Fourth Avenue, improvements to the Ladysmith Fire Hall and updating the Waterfront Sub-Area Plan. The budget also continues contributions of 10 per cent of property-tax revenue for capital projects and 5 per cent for the eventual replacement of assets, such as City Hall and the Fire Hall. These investments are an important part of our long-term asset management strategy.

It’s also important to note that inflation and known cost increases on everything from postage and supplies to wages take up a significant part of a two per cent increase.

During the process of reviewing the 2016 budget, council also considered items that had not been included in the original preliminary budget. These were not easy decisions to make. With a municipal budget of about $6.5 million, spending $65,000 more means a one per cent increase in the budget. That doesn’t leave a lot of room for accommodating new expenditures. Other requests that council added to the preliminary budget, include hiring two summer students to carry out trails maintenance, video streaming for council meetings and an additional $2,400 for Grants-in-Aid to support community organizations and events, such as the Festival of Lights, Ladysmith Days, Ladysmith Resources Centre Association, the Arts Council, the Historical Society, Museum and Archives, Community Gardens, the Frank Jameson Bursary and many others.

Council also approved a request to fund a new administrative support position for the Ladysmith RCMP Detachment. Adding this position means that officers spend less time on administrative matters and more time keeping our community safe. This new position was on top of the original increase of four per cent to the 2016 RCMP budget.

After all these decisions, the Town’s municipal budget now stands at $6,535,602. When you add in our required contributions to the Ladysmith RCMP Detachment ($1,150,102) and the Vancouver Island Regional Library ($353,236), the total overall budget is $8,038,940.

Setting the budget was the first step. Next, we had to determine how to pay for everything. Each year, our revenues come from a combination of property taxes, grants, utility fees for water, sewer and waste collection, parcel taxes, recreation fees, permits and licences and rental of Town property. We also draw from reserves built up from contributions, such as parcel taxes and development cost charges. However, most reserves have restrictions placed on what the funds can be used for, so the reserve funds generally go to specific projects, not into general operations.

Council has been very mindful of the effect of property tax increases on our citizens. We are aware that for many of you, property assessments have increased; in Ladysmith, the assessed value of properties in the residential class went up by almost about three per cent. We also want to be fair in allocating taxes across classes. We are mindful of the assessment increases, and we also want to continue our policy of reducing our reliance on the industrial class.

As of this writing, we have given the first three readings to a Tax Rates Bylaw that will see an increase of 3.11 per cent after non-market change in the residential property class, 1.56 per cent in the business/commercial class (half the residential tax rate) and no increase in the industrial class. These numbers represent the total number of dollars garnered from all properties in the class, and it can be confusing to determine how it relates to your property. Your individual property assessment will play the largest role in determining what your tax bill will be. If your assessment increased (as many do year over year), you are likely going to pay a little more in property taxes. If your assessment has gone down, you will likely pay a little less. As I have already mentioned, RCMP and Library contributions are not controlled by the Town, but delivered to us after those organizations have completed their own budgets. We are also mindful of those changes when working through our own budgets.

We would of course prefer not to increase taxes at all. However, reducing our budget while costs continue to increase would mean cutting services we have all come to appreciate or rely on. We are also faced with the need to build a new water filtration system in order to meet standards laid out by Island Health (who issues our water supply licence). We have budgeted significant grant revenues this year to help cover the costs, estimated to be a total of $14 million over the next two years. We have also, reluctantly, increased the water parcel tax paid by every property owner in Ladysmith from $160 to $225 for the year, in order to help pay for this major upgrade. We continue to explore our options, and you will be hearing more about the challenges of delivering water in the coming months from all sides of the debate.

A balanced budget is a balancing act for council. We have factored in revenues, economic activity, demands from senior governments, core services, the needs and preferences of our citizens, the input many gave us during the budget consultation process and our strategic priorities to arrive at the 2016 budget. I urge you to go online or drop in to City Hall to see the full budget document as well as our strategic plan. It lays out in greater detail what I can only begin to touch on here in 1,000 words. All members of council welcome your feedback.

– Mayor Aaron Stone, astone [at] ladysmith [dot] ca

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