Lake Country is considering a four per cent tax hike. On Tuesday, December 14, at the special council meeting, Lake Country council began its budget deliberations with a presentation from the CAO outlining the alignment to the Council Strategic Priorities and the Corporate Business Plan to the District finances and account allocations. Staff presented some policy recommendations and will provide a draft budget and five-year financial plan to council at the beginning of 2011 for a second budget meeting to be held on January 25.
In a nutshell, staff asked council if it agreed on three main objectives:
Maintaining the current level of service provided to the community and residents
Replenish the current reserves, which have been depleted in the last few years
Address the issue of aging infrastructure that the District, like all other municipalities in Canada, is facing.
Council agreed that these three objectives are a financial priority and gave staff the green light to prepare a budget based on them. In order to maintain the current level of service provided to its residents, council needs to deal with a number of increases from other agencies, contractual obligations, and inflation, which in itself is 2.4 per cent. RCMP costs alone will increase by about $135,000. The total increases can be covered with a 4 per cent increase in taxes. Staff will work on options for council to consider. The effect of a 1 per cent increase for each 100,000 of property value is $2.75. The average property is assessed at $502,000, so a 1 per cent increase would be a total of $13.80. “To put it in perspective, that would be the cost of a Chai Latte and a packet of cigarettes” says Alberto De Feo, District Administrator, to Council. "A tax increase of 4 per cent would result in the average taxpayer paying around $55, which is the equivalent of a nice dinner. This is very good value for what we get back from the municipality and it’s an annual cost.”
In the last five years, Council approved tax increases ranging from as low as 3.2 per cent to as high as 4.9 per cent or an average of 4 per cent. To replenish the reserves, staff have recommended that the portion of property taxes that goes into reserve accounts be increased from 4.5 per cent to 5 per cent. This is not a tax increase but a transfer of money from what is collected to those reserves. Finally, the total value of Lake Country infrastructure is about $250 million. Half of it needs to be replaced in the next 20 to 30 years as it is aging and deteriorating. This is prevalent in all Canada and all municipalities have been or are going to raise money, specifically to address this issue. It is called infrastructure deficit, in the sense that money is needed to be set aside for future repairs or rebuild. In the case of Lake Country, in order to adequately address this issue, the District needs to spend an average of $4.2 million in capital projects on roads, water, sewer and other infrastructure annually. In 2010, only $500,000 from property taxes, parcel tax, and direct fees were spent for this purpose. Staff are recommending that a long term solution be sought to achieve the appropriate level of funding.
In a nutshell, staff asked council if it agreed on three main objectives:
Council agreed that these three objectives are a financial priority and gave staff the green light to prepare a budget based on them. In order to maintain the current level of service provided to its residents, council needs to deal with a number of increases from other agencies, contractual obligations, and inflation, which in itself is 2.4 per cent. RCMP costs alone will increase by about $135,000. The total increases can be covered with a 4 per cent increase in taxes. Staff will work on options for council to consider. The effect of a 1 per cent increase for each 100,000 of property value is $2.75. The average property is assessed at $502,000, so a 1 per cent increase would be a total of $13.80. “To put it in perspective, that would be the cost of a Chai Latte and a packet of cigarettes” says Alberto De Feo, District Administrator, to Council. "A tax increase of 4 per cent would result in the average taxpayer paying around $55, which is the equivalent of a nice dinner. This is very good value for what we get back from the municipality and it’s an annual cost.”
In the last five years, Council approved tax increases ranging from as low as 3.2 per cent to as high as 4.9 per cent or an average of 4 per cent. To replenish the reserves, staff have recommended that the portion of property taxes that goes into reserve accounts be increased from 4.5 per cent to 5 per cent. This is not a tax increase but a transfer of money from what is collected to those reserves. Finally, the total value of Lake Country infrastructure is about $250 million. Half of it needs to be replaced in the next 20 to 30 years as it is aging and deteriorating. This is prevalent in all Canada and all municipalities have been or are going to raise money, specifically to address this issue. It is called infrastructure deficit, in the sense that money is needed to be set aside for future repairs or rebuild. In the case of Lake Country, in order to adequately address this issue, the District needs to spend an average of $4.2 million in capital projects on roads, water, sewer and other infrastructure annually. In 2010, only $500,000 from property taxes, parcel tax, and direct fees were spent for this purpose. Staff are recommending that a long term solution be sought to achieve the appropriate level of funding.
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