The City of Nelson’s Colin McClure presented his proposed 2019 budget to the public on Monday. Photo: City of Nelson video screenshot

Nelson presents proposed 2019 budget with undecided tax increase

Further details will be available after a council meeting in April.

If there is a tax increase in Nelson this year it will be under two per cent, the city’s chief financial officer told the three residents who attended a public budget meeting Monday.

Nelson recently got $158,000 from the Regional District of Central Kootenay to compensate the city for rural residents’ use of city parks. This is a new arrangement this year and is the result of discussions over several years between the RDCK and the previous city council.

Whether there will be a tax increase depends on whether council decides, sometime in April, to use that money to fund existing services or add new ones.

Regardless of what council decides, city taxpayers will still pay for parks through their taxes to the RDCK, which appear as a separate item on their tax bill.

Colin McClure explained that of the city’s $46 million budgeted revenue, just over $10 million will come from taxes and this funds the city’s operations including fire, police, garbage, cemetery, parks, transit, library, roads, reserves, salaries and benefits. The rest comes from utility user fees, hydro sales and other user fees and from grants, to fund utilities and capital projects.

This video shows McClure’s entire budget presentation.

Even if the city imposes a zero per cent increase, Nelson residents’ overall tax bill could still go up over last year. That’s because the city also collects taxes on behalf of other agencies, and city taxes account for only 44 per cent of residential tax bills for an average single family home. The rest consists of taxes collected for the RDCK (17 per cent), schools (36 per cent), regional hospital district (three per cent), and the BC Assessment Authority (one per cent).

The city’s sewer, water and hydro utilities are not funded through property taxes but are self-funded through user fees.

There will be an overall sewer and water rate increase of 1.75 per cent or $19 for an average family home. Hydro bills will increase by 1.5 per cent for urban customers and 2.94 per cent outside the city.

McClure said projected increases in revenue this year include $79,000 in taxation from new building developments, an increase of $90,000 in parkade revenue following the transfer of the running of the facility by the city-funded Youth Centre, $125,000 in increased building and development permit revenue, $60,000 in increased parking meter revenue, and the $158,000 from the RDCK for parks.

He said expenditures will change in the following ways: $31,000 for a summer beat officer, increases in graveyard shift for the public works department to the tune of $131,000 and a $50,000 increase to building inspection staffing because of increased construction activity.

Many further details can be found in the video above or in McClure’s document attached below.

McClure said large increases in property assessments do not necessarily mean a large tax increase, especially for homes close to the average assessment increase, and they do not necessarily generate more tax dollars for the city.

He said 75 per cent of the taxes collected are from residences and 25 per cent from businesses, and the rate is adjusted each year to keep this ratio static, to counteract the fact that residential assessments increase at higher annual rates than commercial assessments.

For residences, the mil rate is adjusted to produce the same amount of taxation collected as last year. Then any tax increases are decided in addition to that.

“So we allow for a balancing,” McClure said, “to make sure we are only collecting the amount of taxation we collected in 2018, based on the new assessed values. If we kept the tax rate as is, yes, you would see a significant increase in taxation revenue [if assessed values are higher than last year].”

McClure also went into detail about business taxes, property assessments, services, transit funding, reserves and debt.

His slide presentation is attached below.

City of Nelson 2019 Financi… by on Scribd

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