Colin McClure, Nelson’s chief financial officer, presented the city’s 2021 budget to the public on April 7. Photo: Bill Metcalfe

Colin McClure, Nelson’s chief financial officer, presented the city’s 2021 budget to the public on April 7. Photo: Bill Metcalfe

Nelson budget 2021: taxes up by 1.75%

City says the increase is largely due to inflation

Nelson property taxes will rise by 1.75 per cent this year for both businesses and residents, following no increases in 2020.

In 2021, for a single family dwelling assessed at $504,000, city property taxes will go up $29, sewer rates by $10, water rates by $7, for a total of $46 per year or $3.85 per month.

For commercial properties, based on a $1,000,000 assessed value, property taxes will go up by $146 per year or $12 per month, with no increase in water or sewer rates.

For residential garbage and recycling, the fee was increased from $40 to $75 in 2020 to fund new recycling bins and will stay at that level in 2021 to help fund a new organic waste pickup program.

This draft budget information, set to be adopted by council on April 13 beyond the deadline for the Nelson Star’s print edition, was part of Nelson’s chief financial officer Colin McClure’s formal budget presentation given on April 7 online.

The hour-long presentation, entitled Budget Open House, can be viewed at Nelson City Council Youtube.

McClure pointed out that for Nelson residents and businesses, those taxation numbers are not the whole story. When tax notices arrive, they will include hospital and school taxes (amounts not determined yet) and taxes from the Regional District of Central Kootenay for regional services such as recreation and waste management.

For every $100 on a Nelson residential tax notice, $49 goes toward City of Nelson taxes, $28 to school taxes, $19 to the RDCK, and $3 to hospital taxes.

The RDCK portion of a Nelson resident’s tax bill will increase for 2021 by 6.41 per cent, driven largely by construction of the new organic waste facility in Salmo and the rehabilitation of the HB Mine tailings site near Salmo.

Pay increases

Wages and benefits at the city amount to about $12 million per year.

McClure said that in addition to pandemic uncertainties, one of the biggest challenges in creating this year’s city budget is that the 169 regular employees in the city’s three employee unions are all without contracts. Negotiations are underway with the Canadian Union of Public Employees (CUPE), but they have not yet started with the police and fire unions.

The difficulty, McClure says, is anticipating whether agreements will be reached this year, and the cost of them. This cost would include retroactive payments because all unions have been without contracts for approximately one year.

Where Nelson’s revenue came from in 2020. Illustration: City of Nelson

Where Nelson’s revenue came from in 2020. Illustration: City of Nelson

Quick facts

McClure presented the following list of quick facts about the city budget:

• Operational revenue: $57 million

• Operational expenses: $38 million

• Revenue over expenses pays down debt and flows into operational and capital reserves

• General fund operational expenses (expenses without hydro and other utilities) and allocations to reserves are budgeted at $23 million for 2021, funded by $10.8 million in taxation

• A one per cent increase in taxation produces about $95,000 to cover operational expenditures

• Without the dividend from Nelson Hydro to city operations, taxes would have to increase by 30 per cent.

McClure explained that of the city’s $23-million budgeted revenue, just over $10.8 million will come from taxes. This funds the city’s operations including fire, police, garbage, cemetery, parks, transit, library, roads, reserves, salaries and benefits.

The rest will come from utility user fees, hydro sales and other user fees and from grants, to fund utilities and capital projects.

He said the conferences of the Federation of Canadian Municipalities and the Union of BC Municipalities occurred online in 2020, and this led to considerable savings in travel and accommodation for council members and senior staff. The same applies to training and professional development.

Where Nelson spent its money in 2020. Illustration: City of Nelson

Where Nelson spent its money in 2020. Illustration: City of Nelson

COVID-19 recovery

McClure said that in late 2020 the city received $2.6 million from the province as COVID-19 relief. He said $747,000 of this covered revenue shortfalls from parking meters, the parkade, field rentals, youth centre revenue and waived patio fees. And $653,000 will cover pandemic-related expenses such as emergency and bylaw operations, support for vulnerable populations, protective glass and sanitation supplies, pandemic-related computer enhancements, and additional cleaning.

The remainder will be spent in 2021 to cover similar shortfalls and expenses plus an analysis of the economic impact of the arts, a new waiver of patio and sidewalk fees, and a not-yet-designed grant program for non-profit groups needing help with pandemic recovery.

Assessments, surpluses and debt

The budget presentation also included:

• The role of property assessments in taxation

• How commercial taxation is calculated

• Surplus and reserves, their meaning and purpose

• Debt and debt servicing

• Details of utilities operations and costs

The proposed budget will come before council for approval at its April 13 meeting.

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