Better understanding Municipal Taxes in the Crowsnest Pass

Its amazing how politicians positions change before and after an election!

During the campaign there was several candidates that stated they would not support a tax increase, one candidate stated on his literature that he would never support a tax increase, another stated that he would vote as close as possible to zero.

Then the first budget comes along and to our surprise it includes a tax increase, yes I sat in those council meeting and there was three people that voted against that increase but to his credit (Saindon) was the only one that spoke against it, very easy to vote against something and not say a word because its going through anyway.

Now the heat turns up a little bit because there was a tax increase, and because of the wonderful part of the equation called market assessment I have heard of some people being as high as 10%.

Then as I have raised a number of times we all know that during the budget process a number of new positions were created, with the old trick of building in the wages for 12 months knowing full well that the budget does not get passed before April, they are just filling those jobs now so there was at least four months of wages not used, the Foreman's job is still being advertised so that is not going to be filled for at least two more months.

So now the politicians are blaming the province for a tax increase, due to the ASFF and the Seniors Housing increasing their requisitions. Well everybody that been on or around council knows that happens every year. Councilor Mitchell saw that the last three years, I stressed during the election that it was important to have some experienced councilors on the next council for this very type of reason. But one of the present councilors basically stated that, that was nonsense experience was not such a important factor.

Never the less when the ASFF went up by $175,000 and the seniors went up by $18,000 the council had an option they could have taken the dollars saved on wages above and offset those increases, they choice to on the seniors side which will save the average tax payer a whopping $5 this year. But the real issue the ASFF they choose to ignore.

Anyway back to the tax increase they wish to now say the dollars they pick up from Joe Blow taxpayer did not increase this year that its all the provinces (ASFF) fault, its their portion that went up.

Well lets give them some slack here and compare apples to apples lets look at the number of dollars raised by General Municipal Taxation lets put aside the ASFF and the Seniors housing. Where do we find that information? Go to the Mill rate bylaw on the municipal web site. Below is an example from 2009 Bylaw 777 under the whereas you will see a line like the one below it shows the amount of dollars collected by General Municipal Taxation.

"Example 2009 Bylaw 777
WHEREAS, the estimated municipal revenues and transfers from all sources other than taxation is

estimated at $14,354,981, and the balance of $6,360,015 is to be raised by general municipal taxation;

In 2008 the number was $6,277,689
In 2009 the number was $6,360,015
In 2010 the number was $6,432,821
In 2011 the number is $6,555,990

So lets do the math 2009 increased by $82,326.
2010 increased by $72,806.
2011 increased by $123,169

Wow the general taxation went up this year by almost $50,000 more than the previous year, I hope we don't see zero tax increases like this every year. Based on the above numbers previous council did not do so bad.

Then other questions come up, a lot of which have already been pointed out by the commenter's on my blog.
Despite only increasing general taxation last year by $72,806 council managed to do the following:
$450,000 back into reserves
$350,000 surplus
$250,000 equipment purchase out of the municipal budget.

This year despite increasing general taxation by a whopping $123,169 council will manage to do the following:
$100,000 into reserves
Virtually zero surplus except what will be created by putting all those new wages in the budget that will only be used for a portion of the year.
$530,000 in debt taken on to purchase new equipment.


One last point I have heard comments being thrown around regarding reserves and the way they were previously and abused, I have stated before I did not always agree with every Infrastructure project the municipality did, but I would challenge any of the present council to point out a project we should not have spent those reserves on which projects were unnecessary.

Municipal Reserves the sequel.

It is with great interest today that I read Councilor Gallants blog regarding the issue of Municipal Reserves. It makes me very excited to see that one councilor is obviously not going to lose focus on this very important issue, my only hope is that the policy for this issue is dealt with a little faster than the advertising policy. It is now been almost six months since that issue was raised at council and the policy is still not in place. I would hope something as important as the “municipal reserve policy” would not be tangled up so long that it would not be in place for the next budget.

Councilor Gallant comments to the use of reserves as a slush fund by previous councils I guess that resonates well with an audience over a couple of latte’s but the truth is a little bit different than that. I did not always agree with some of the previous council’s decisions on infrastructure, but over the last nine years, the $1.9 million that was taken out of reserves was used in combination with various government grants to get us $30 million in Infrastructure projects completed.

But never the less I always was one Councilor (not the only one) to emphasize the importance of building reserves, that’s why last year the majority of Council agreed that it was time to start rebuilding the reserves, which led to a budget that required a $450,000 contribution to the reserve fund. I am happy to hear that thanks to the prudent financial decisions of the majority of that previous council that there appears to be a $350,000 surplus for 2010. Some may not see that as much of an achievement but looking back over the last 10 years most Irwin led councils ran in the red.

Anyway, the issue of reserves how do you know what is enough. Well first thing I do is compare ourselves to other municipalities they can’t all be wrong, where do you find that information Municipal Affairs, their most recent figures to the end of 2008.

Reviewing 108 towns in the province with a population of 441,647, those towns had reserves between them of $474,622,492 or in simple terms $1075 per person, how does the Pass compare to that? $231 per person.

Should plans be in place for reserves? Absolutely (I caught the comment about lack of planning) but anybody who predicted eight years ago that there was going to be a recession in 2007 for a couple of years and that the federal/provincial governments were going to come forth with a stimulus program for municipalities, I want that individual picking numbers for me for Wednesday night.

Also, keep in mind every year previous councils were provided by administration both long term Infrastructure and equipment replacement programs. Did we always get sound advice, well its not that long ago administration was leading down the path of building a new town shop in Coleman that started out as a $300,000 venture, three years later it was up to $1.3 million if the majority of council had not saw fit to put a stop to that you would have no reserves today. The only point of that statement is to state that long-term plans are only as good as the information being provided to you.

Should taxes be raised to build reserves? Previous council managed to place $450,000 into reserves, and create a $350,000 surplus by increasing taxes 3.2% (Including ASFF and Seniors Housing) this year taxes including those outside requisitions went up 2% not a whole lot of difference 1.2% to be exact which in dollar terms is roughly a difference of only $80,000. However, the only money that was placed into reserves was the $100,000 for the lodge, versus the $450,000 put aside last year.

Let us also not lose sight of the requirement to borrow $530,000 to purchase new equipment this year.

Now let us talk about the issue of needs for reserves how much money should be put aside? I agree with Councilor Gallant the municipality does need to determine what the needs are for the long term. To this end, and yes I know it is only preliminary at this point but Myron Thompson the Director of Public Works reviewed with council a few meetings back the long term Infrastructure plan and the equipment replacement program. He stated that the municipality would need to put aside $430,000 per year for infrastructure and $410,000 for equipment replacement Add that to the $100,000 a year for the lodge gives you a total of $940,000 per year.

How will that amount be raised? If that number is even remotely close that equates to a tax increase of 14% next year (remember that would not include ASFF or Seniors Housing). At this point, nobody as even spoke about putting aside dollars for new recreation facilities. Wow, there better be many inefficiencies out there.

One more thought on the issue of policy, I keep hearing the need for policy because councils and administrations change every few years. I recognize also the importance of policy but let us not lose sight of the cold hard facts on policy. As this council spends a lot of time and energy on creating policy, first, it is only as good as the people enforcing it and second it can be changed by the political whims of future council just as quickly as it can be created.