Breaking down the budget

For many Powell River residents, the closest they will come to understanding the City of Powell River budget process is when they fill out a cheque to pay for their property taxes.

Understanding the budget is a time commitment, and time is something not many in any community have to spare. But, as Mac Fraser, City of Powell River chief administrative officer, states in a Task Force Economics Report he authored on understanding a city budget, education is key to community involvement.

The report was written while Fraser worked with the Village of Cumberland, on Vancouver Island. In it he identified that knowledge of the city economy can help people make informed choices about future development. Considering city finances in the same way a typical household budget would be managed is a good starting point.

“Each of us have to run our home,” he said. “We try to keep the basics in good shape to serve us now and in the future.” The city budget provides a road map.

“One of the main issues that’s come up as a result of [acting director of financial services] Lynda Sowerby’s first budget presentation, is that our municipal assessment, which is a metric we use to figure out how much tax to charge people, has gone down 2.3 per cent,” Fraser said. “This means we have 2.3 per cent less revenue. This is a challenge because the last two councils very courageously shifted a great deal of the tax burden off major industry, which in this town is the mill, and transferred that to the residential taxpayer. To a lesser extent to business as well.”

Fraser pointed out that this shift was a key factor in helping the mill to restructure and stay in business. “As a result of this shift, council has recognized the need to try and find ways of addressing present challenges without increasing residential taxes again,” he said. “There is a limit to what we can ask. And council recognizes that we have asked the residential taxpayer to the maximum. And yet, if we just maintain the status quo we won’t thrive and prosper as a community.”

In his report, Fraser wrote that plans and policies do not have staying power if developed without strong citizen involvement. “At worst, they will be used to create unhealthy communities. When people feel left out of important decisions they will be less likely to become engaged when tough decisions need to be made.”

The majority of the money the city receives comes from residential, commercial and industrial property taxes.

Property taxes are calculated upon the existing tax rate, the assessed value and the classification of the property. Value assessments are provided by BC Assessment Authority. These numbers are based upon real estate sales of comparable homes in the same area from the previous year.

The existing tax rate is calculated as a percentage per household. “Property taxes are paid in order to maintain services that the community deems to be important to the fundamental operation and health of the community,” Fraser said.

At the first city budget meeting on Monday, March 3, four members of the public attended. A budget presentation was made by Bert Finnamore, Powell River Historical Museum and Archives Association’s heritage manager, detailing a progressive plan for museum operations over the coming year. The meeting also included Sowerby’s budget overview. Additional budget meetings are being arranged.

“The real challenge council has before it,” Fraser said, “is to respectfully engage the community and help them to understand the tough decisions that need to be made moving forward.”