Budget process ‘a wake-up call’

Nelsonites are almost certainly facing a two per cent property tax hike, as the city signs off on a budget some councillors are calling the toughest they’ve ever faced.

  • Mar. 8, 2011 7:00 a.m.

Nelsonites are almost certainly facing a two per cent property tax hike, as the city signs off on a budget some councillors are calling the toughest they’ve ever faced.

Council gave Nelson’s 2011 financial plan its first three readings Monday, and will give the budget final approval at a special meeting at 3:45 p.m. today.

The tax hike will see an average homeowner pay about $91 more in property taxes — but that number doesn’t include the extra cost of sewer, water and hydro fees, which were also raised in the budget for 2011.

The city went into this year’s budget facing a shortfall of more than $700,000, which would have required a tax hike of more than 10 per cent.

“I think this is the toughest and scariest budget process I’ve been through over the years,” councillor Donna Macdonald told council as Monday. “Starting with a 10 per cent budget increase was a bit shocking.”

Staff were able to bring that number down by cutting money allotted for staff travel and training, hiking transit, parking meter and permit fees, and reducing the number of city workers. Nelson’s public works department will also have $70,000 less in next year’s snowplowing budget.

“We’ve made reductions across all departments: police, fire, finance, purchasing,” says city manager Kevin Cormack, adding most of those reductions will come when current staff members retire and their positions are not filled.

With cuts and the tax hike in place, the city is forecasting a surplus of $178,750. The majority of that will go into its water licence and building reserve fund, which pays for the city’s parks, its information technology program and many of its capital projects.

While most of council seemed content with the two per cent hike, Councillor Bob Adams continued to push for an unchanged rate.

“We’ve raised everything this year, and I thought we could leave the tax increase at zero,” he told council, before voting against the budget on all three readings.

Councillor Kim Charlesworth, meanwhile, told the Star she would have liked to see taxes go up by as much as three per cent. She says that increase would have better reflected the wage increases for city staff council had agreed to for the year, which made up much of the $700,000 shortfall.

“When we’re doing our collective agreements we say ‘this sounds fair, let’s do this,’ and when we do our budget we go, ‘oh my god… we can’t ask people to pay more thank two per cent.’ Well, where does that leave us?” she said.

“That means we have to look in a very hard way at restructuring what we do and cutting what we do. And we haven’t had those conversations yet, but we need to have it.”

Charlesworth said she thinks this year’s budget is a “wake up call” for the city.

“Things aren’t going to get any easier,” she added. “This wasn’t an abnormal year. This was a sign of things to come, I think, and it’s only going to get more expensive.”

Cormack says some of the changes made for this year’s budget, such as the staff reductions, should make future financial planning less harrowing than it was in 2011. However, with more city contracts up for negotiation this year there is a possibility of more difficulty in 2012.

“I’m hoping we’re not facing a $700,000 problem in next year’s budget,” he said.

“We’re hoping some of those cost pressures will be less going forward, but that will be determined after labour negotiations.”