The average Sechelt homeowner with a sewer connection will pay about $234 more in taxes and levies next year, if council approves a preliminary 2017 budget without changes.
The $234 figure breaks down to $65 more in taxes for a home worth approximately $412,000, $150 more in sewer levies and $19 more for solid waste next year.
Coun. Noel Muller called the increase a “serious reckoning” that council was expecting.
“I’m aware that council’s probably looking at those numbers and considering the political ramifications of the decision on this basis,” Muller said when the numbers were presented to councillors on Nov. 9.
“But we know – if you’ve gotten into our budgets and into our finances in any level of detail – that there is a serious reckoning coming on the financial end and that’s not due to the actions of this council, but it’s due to the inactions of many previous councils.”
He said he was “actually relieved” the increase to taxpayers wasn’t going to be larger in 2017. “I think it’s much better than it could be,” Muller said.
Director of finance Doug Stewart walked Sechelt councillors through the preliminary budget relating to property tax, sewer and solid waste during the Nov. 9 finance, culture and economic development committee meeting.
Increased staffing costs, a new contingency fund and the first steps toward addressing district-wide capital depreciation are some factors that drove up the preliminary property tax budget, Stewart said.
As new hires become full-time, year-long employees, the staffing budget will go up $188,171 in 2017, he added.
The budget will also have to be adjusted upwards by a total of $102,100 just to meet current overspending in departments like public works and justice services.
“They just have not had sufficient funding in there,” Stewart noted. “So they’re not changing the operations of what they’re doing. We’re basically just correcting the budget issue.”
Two other major increases in the 2017 preliminary budget were line items Stewart added, including $200,000 in contingency funds and $220,000 in increased funding for capital depreciation in the district.
The major budget increases (along with several other smaller ones) would have made for a much larger tax increase than $65 for the average homeowner, but Stewart found some savings by shifting $338,617 in sewer administration costs to the sewer budget and $50,054 in fees related to solid waste to the solid waste budget.
“Solid waste, sewer users and property taxes should be kept separate and charges for each of those areas should be kept separate,” Stewart said, explaining that in the past general property taxes have subsidized things like sewer administration costs.
The separation of charges based on services will keep costs in their respective categories and see a sewer levy rate increase of 38.37 per cent ($150 for an average home) and a solid waste levy rate increase of 9.1 per cent ($19 for an average home) if the preliminary budget is accepted as it stands now.
Stewart stressed that preliminary budget numbers could change before a 2017 budget and five-year financial plan are adopted by council. He expects to have the proposed five-year financial plan before council in December.
“There’s a lot of big numbers in here but nothing written in stone until council ultimately decides to do that,” he said.
Councillors accepted Stewart’s preliminary budget report and asked for more information on some numbers, such as the overspending in the justice services budget that Stewart said was due to higher than anticipated maintenance costs.
“We’re seeing a trend that they’re spending approximately $50,000 on maintenance in that building every year,” Stewart said.
Muller was concerned, noting the justice services building isn’t very old. “That’s something I’d like to know a little bit more about,” he said.
Mayor Bruce Milne also noted one fee of $50,000 in the sewer levy budget could be moved over to general property taxes as it funds the Liquid Waste Management Plan, which is meant for areas not yet hooked up to sewer.
Milne thanked Stewart for his preliminary report that held some of the biggest proposed tax and levy hikes seen “in the history of councils in Sechelt,” adding his council had been forewarned for some time it was coming, “including by the previous council and the financial advisory committee.”
