City of Fernie city hall. (Scott Tibballs / The Free Press)

City of Fernie city hall. (Scott Tibballs / The Free Press)

Fernie opts for 5 percent tax increase for 2022: City budget

Councillors settled on a 5 percent tax increase to cover budget shortfalls and pump up reserves

City of Fernie councillors have voted to support a 5 percent tax increase for 2022.

At a special council meeting on Feb. 15, councillors voted 6-1 to support the increase following three sessions of budget presentations detailing ongoing and upcoming projects and budgetary needs for the city.

After capital projects, growing expenses and additional staffing requirements, a budget shortfall of $291,817 was identified in the budgeting process for 2022, of which the city would need to raise taxes by 3.91 percent to cover.

The city expects some increased revenues for 2022, such as $171,000 anticipated from new construction, $100,000 for building and development permits, an extra $93,000 from the Elk Valley Property Tax Sharing Agreement (EVPTSA) which is from Teck, and another $46,000 through the Regional District of East Kootenay for rural fire services.

However there are increased expenses as well, such as $450,000 budgeted for new positions with the city, another $180,000 for snow removal, and $30,000 in insurance costs.

During discussion councillors voted to go above the 3.91 percent required to balance the budget, and opted for a 5 percent increase instead (a difference of a little over $81k), with those additional funds to go towards setting aside a reserve fund for affordable housing support.

Only councillor Phil Iddon opposed the 5 percent increase, saying that he was unwilling to support a tax increase for affordable housing when the city was yet to figure out how to sell property to do that instead – discussions he said had been ongoing for years.

According to last year’s budget process, the city owns 42 assets, which includes buildings and land.

“That money (from selling land) could have gone into that fund already,” he said.

“I think there’s going to be ample opportunity in the very near term to generate revenue for affordable housing … if we just move ahead with the policies and disposition of some of the lands we do have that are eminently develop-able.”

According to Chief Administrative Office Michael Boronowski, those discussions were indeed proceeding, with work to come on that file.

Despite Iddon’s concern, the rest of city council opted to support the 5 percent increase, which was originally put forward by Mayor Ange Qualizza, who said that the city needed to be in a ‘cash-positive’ position to support any affordable housing opportunities that came along in the near future, such as working with local affordable housing advocates or with the province to add affordable housing stock.

Currently, the city’s reserve fund for land development (under which affordable housing could potentially fall under) is only $15k.

Councillor Troy Nixon indicated he supported even higher taxes up to 6 percent to shore up reserves due to the looming risks posed to infrastructure at risk of catastrophic failure – of which four were identified by the city, being wastewater treatment upgrades, water supply concerns, a protective services facility (Fernie Fire and Rescue) and the need for realignment of water and sewer mains identified as being on an unstable slope ‘which are at imminent risk of failure’ according to the city’s capital plan.

The majority of the council stuck to a 5 percent increase with the additional money to go towards an affordable housing support reserve.

Going forward the council will receive a completed draft of the budget proposal and included 5 percent tax increase at the Feb. 22 Committee of the Whole meeting, and after that (if councillors vote to give it a first and second reading) it will be open to public consultation. A summary of public input will be presented to council on Mar. 7, and community feedback will be baked in (or not) from that meeting, for the budget to be adopted on Mar. 14.

Within the budget as proposed (which is available on the Fernie civic documents website and recorded on Facebook), the city has notably forecast the need for $7 million in borrowing for a new fire hall replacement, with that borrowing predicted to fall in 2024.

The skate park replacement funding ($1.3 million) in 2022 is also earmarked as coming from grants, which are yet to be secured.

Community partnership funding will also continue, with some $662k going to groups such as the Fernie Chamber of Commerce to operate the Visitor Information Centre, the Senior Citizens Club of Fernie and District to operate Senior Citizen’s Drop-In Centre,the Fernie Heritage Library, the Fernie and District Arts Council (Arts Station) and the Fernie and District Historical Society for the continued operation of the Museum.

Operating grants to the community partners are mostly unchanged from 2021, when they received a trim in funding to help the city budget be balanced. Only the Chamber of Commerce and Heritage Library received larger grants (an extra $2k for the chamber and an extra $8k for the library) but facility operating expenses covered by the city are noted to be higher in 2022 for four of the five partners, which operate out of city-owned buildings.

READ MORE: Fernie Fire and Rescue to temporarily relocate
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