City of Powell River’s finance committee members were recently presented the second draft of the 2023 to 2027 financial plan, indicating a 5.4 per cent increase to the city’s budget from 2022.
At a meeting on January 26, chief financial officer Mallory Denniston said the total property taxation increase is still at 5.4 per cent, which is where it was in the first draft of the five-year plan.
“I haven’t made changes to the total property taxation because there has been so much rigour behind that number on what we need to continue our operations,” said Denniston.
She said that has not changed, but what has changed is transfers to reserves, plus capital and special projects, now that the city has some new data at the start of 2023.
Denniston said the city has aging infrastructure, and the town boomed about 50 years ago so the aging infrastructure is coming due, based on when a lot of it was built.
“Infrastructure has that 50-year to 70-year life,” added Denniston.
She said the largest chunk of the city’s capital plan is happening in 2023. Much of that number is the consolidated wastewater treatment plant, she indicated.
Denniston said capital funding is a big question and for 2023, 40 per cent is grant funded, “which is excellent.”
“Our staff has done a wonderful job securing grants,” said Denniston.
She added that 19 per cent of capital cost is debt and 41 per cent is revenue, being various sources of tax, charges and user fees.
In terms of transfer to reserves in 2023, the planned figure is $6.8 million. According to a table created by Denniston, the total reserves and unappropriated surplus amounts to $29.7 million.
In terms of properties, Denniston said in 2023, there was an 18.5 per cent increase to the assessed values compared to 2022. She said 16.4 per cent of that is market change, which is the change based on supply and demand.
“We have had an increase in demand for real estate and the supply hasn’t caught up fast enough, putting pressure on the price increase,” said Denniston. “The value of your house is higher now because there are more people who want it. There was also a 2.1 per cent increase not due to market change, but being attributable to factors such as new development, class changes and subdivisions.
Denniston said another piece of information the public likes to know is average tax assessment. The total property taxation for the city for 2023 is $21.3 million. She said residential taxation has gone from 65.7 per cent of the total tax burden to 66 per cent, which is a “very small shift.”
Denniston said what is indicated in the five-year financial plan is a 4.4 per cent increase in taxes for an average single-family dwelling, or $147, factoring in parcel taxes, user fees, variable tax and the municipal flat tax.
“What people want to know is how much more they are going to have to budget,” said Denniston.
She said the city also collects taxes for other authorities, which is about 27 per cent of the total tax bill.
“It’s important to note this council has no control over the tax from the other authorities,” said Denniston. “Those are requisitions we receive, we levy them, and then we distribute that money back.
“I don’t have insight into where those requisitions will be, except for qathet Regional District. I’ve been following theirs and I see it’s about a 10 per cent increase.”
Denniston said the city will be putting its tax calculator online in February, where taxpayers can put in their property assessments and the calculator will give an estimate of what will be on the tax notice.
“It gives people a lot of time to see where the numbers might land,” said Denniston.
In reviewing tax rates, Denniston said the inflation rate in October 2022 was 7.8 per cent, so the 2023 increase for the average single-family dwelling is forecast to be less than the inflation rate.
Denniston said the future of the major industry site, Catalyst Paper Tis’kwat mill, is unknown. She said the city has a risk mitigation strategy in place for all possible tax scenarios relating to the major industry site.
Councillors carried a motion to continue with the financial plan timeline, public engagement process and preparation and preparation of the 2023 to 2027 financial plan drafts based on city services funded in 2022, as approved by the August 25 finance committee meeting and November 29 committee of the whole meeting, and to prepare draft three of the financial plan and 2023 property tax rates in accordance with deliberations and instructions provided by the finance committee at the January 26 meeting.
The committee also voted for a public engagement session with council and staff in attendance in February or March.