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Fernie reviews 2013 budget and financial plan

As part of the City’s current Five Year Financial Plan, Fernie residents will see a four per cent increase in property taxes in 2013.

Mayor, Council, and City of Fernie staff met on Monday to review the details of the 2013 budget and what it will mean for residents when tax time rolls around.

Fernie is currently in the second year of the 2012 – 2016 Five Year Financial Plan. The tax adjustments set in the plan call for four per cent increases each year. Beginning in the 2012 tax year, property taxes will continue to rise by four per cent every year until 2016.

Jim Hendricks, Director of Financial and Computer Services and Acting CAO for the City, explained a one per cent increase to property taxes translates to an additional $45,000 in revenue for the city, and roughly $13 in additional taxes paid by the average single family homeowner.

“I think when we have a four per cent increase in property taxes, the assumption is that we’re funding a four per cent increase to the operating budget, which isn’t necessarily the case,” commented Hendricks. “Property taxes fund about 60 per cent of the General Operating Budget, with the balance of that coming from the Mine Tax Sharing Agreement, user fees, and grants.”

The four per cent increase will contribute to growing the General Operating Budget by just over two per cent. Roughly half of that budget goes directly to wages and benefits for City staff members.

In addition to municipal property taxes, the City also collects taxes for the Regional District of East Kootenay, regional hospitals and schools, as well as provincial policing and B.C. Assessment.

“I think a lot of people still don’t necessarily understand that we don’t keep all of that money,” Hendricks said. “We collect $10 million in tax, we keep $4.5 million, and $5.5 million we give back.”

In addition to property taxes, water and sewer user fees are also on the rise in 2013. Water user fees will increase by four per cent in both 2013 and 2014, with the additional funds contributing to a more aggressive water capital program.

Hendricks remarked, “The increases are required really to fund the capital program, which is being brought about by more stringent provincial regulations, capacity issues, and the age and condition of our existing distribution network.”

Sewer user fees will see an increase of six per cent in 2013 and 2014, as the City has about $1.9 million of upgrades to finance, which have been recommended through the Liquid Waste Management Plan.

In contrast, garbage and recycling fees have dropped by 30 per cent as the result of a new, and less expensive, contract being signed for 2013.

“We’re going to be paying out less for the garbage and recycling contract and we’re going to be collecting less,” said Hendricks. “It’s a zero net change for [the City], but for the residential property owner it saves about $30 a year.”

Hendricks went on to say, “For a single family home, with the four per cent property tax increase, the water, sewer, and garbage fees, the total annual adjustment would be $50.52.”

While the tax adjustments were set last year, the City is now starting the process of the 2013 – 2017 Financial Plan, so the annual adjustment as it sits right now is not set in stone.

“These are preliminary numbers, with exception to the water, sewer, and garbage fees, which are set by bylaw,” said Hendricks. “So that number could change as we proceed through the process.”

All taxes required from Fernie residents will appear on the City of Fernie 2013 tax notice and are paid to the City.

 

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