Revelstoke city councillors and staff enjoy a moment of levity just before the start of their May 8 meeting when a technician installing Smart Meters in Revelstoke informs them he'll be cutting power to their meeting – which included a final budget vote. They persuaded him to come back at a later date.

Budget 2012: Revelstoke council votes for 2.5% residential tax increase

Residential up 2.5%, commercial up 1%, Downie down 16%. Council builds reserves, achieves recently rare consensus on final budget vote

Revelstoke city council achieved a rare consensus on a final budget vote, unanimously approving the 2012 budget at their May 8 meeting.

In recent years, holdouts such as Coun. Tony Scarcella railed against a plump budget, while another councillor said he’d hold his nose and vote for it.

This year, ‘Hard to swallow’ was mayor David Raven’s metaphor for the 2012 budget: “Often you have to chew on things long enough that we can all swallow it at the end of the day,” Raven commented of the process leading to the May 8 final version.

The budget is a revision of a draft presented about a month ago. That version targeted an across-the-board two-per cent increase for residential, commercial and industrial property taxes.

The budget approved today gives some relief to commercial taxpayers, but adds that burden onto residential ratepayers. The biggest break was reserved for major industry. Here are the details:

– Residential property taxes will increase by 2.5 per cent, slightly more than the previous 2 per cent target.

– Light industry will remain the same at 2 per cent.

– Commercial (business) property taxes will increase by 1 per cent.

– Major industry will experience the biggest drop, down by -16.04 per cent. Downie Timber Ltd. is the only property in Revelstoke in this class. Company representatives lobbied council during budget deliberations, citing ongoing macro-economic woes in the lumber industry. In dollar terms, the reduction amounts to $45,000.

– Overall, the proposal trims 0.8 per cent off of the plan from a month ago, bringing the overall increase down to 1.5 per cent from 2.3 per cent.

– Due to a drop in overall residential assessed values between 2011 and 2012, the residential increase amounts to a $31 annual increase in 2012 for an average $350,000 home. Of course, individual property assessments do vary, so this average will vary significantly on a case-by-case basis.

– A commercial property assessed at $350,000 in 2011 (now averaging $355,845 in 2012) will pay an extra $65 in tax in 2012.

– Under the previous ‘two-per cent’ plan, council had hoped to build $3.2 million in surpluses over the 2012–2016 financial plan. With revisions, the anticipated accumulated surpluses drop to about $2.8 million.

“This is not a perfect budget, but [we’ve started] going in the right direction,” said Coun. Tony Scarcella, who has traditionally been a hard-line campaigner for aggressive cuts. “[In the] last three years, I could not see any light [at] the end of the tunnel.

“This year, [the] increase in taxes are cost of living,” Scarcella said. “Business taxes in five years will be at provincial levels and one of our most important [industries] – Downie – will have their tax frozen. Yes, I’m starting to see the light at the end of the tunnel.”

Coun. Phil Welock expanded on Scarcella’s tunnel metaphor. “Councillor Scarcella said there is light at the end of the tunnel, but due to our failing infrastructure we’re lengthening the tunnel – [which] makes it more difficult to see that light at the end.”

Despite renewed efforts to build reserves in the 2012 budget, Welock felt the city was “not putting enough into our reserves,” he said. “And I see, again, an unfair shift onto the 3,000-plus residences in Revelstoke, but I’m happy with the financial plan as it is.”

Coun. Chris Johnston emphasized the need to spend more on infrastructure. He was critical of efforts to trim fat from the budget: “There was no discussion really about how we can spend less,” Johnston said. “I’m hopeful that that can be part of the budget discussion next year. I don’t necessarily mean layoffs of staff or anything like that … but I didn’t hear a single discussion about where we could spend less.”

Coun. Gary Starling said he supported efforts to reduce commercial taxation, saying the citizens’ budget focus group had underscored that need: “They felt that businesses were paying too much tax, possibly driving them out,” Starling said. “I think it goes a ways to say we’re working towards that and I think for that reason I would support this.”

Coun. Steve Bender said efforts to build surplus could have gone a little further: “This could be suicidal to say this, but I think the increase is a little too low – I could live with another half a per cent – providing it would all go into developing surplus,” Bender said. “This budget does develop a pretty decent surplus in five years, so I think we’re headed in the right direction. But, the more surplus we can build, the less we have to borrow, the cheaper it’s going to be to operate in the long run.”

Mayor Raven said the process had been “long, difficult [and] challenging.” He said he valued discussions with the public focus group and council.

In an interview several days before the May 8 vote, finance director Graham Inglis says the budget maintains existing city services. “I think we’ve tried to maintain services in the budget as they have been in the past,” Inglis said. “There’s no material cuts in any services that I’m aware of in the budget.”

Inglis felt the overall budget increase was reasonable. “The budget itself is showing [about a] one per cent increase in operating costs a year over the five years, which I think is very reasonable when you consider what the rate of inflation is at the moment and what our cost pressures are,” Inglis said. “If we can maintain that, I think that will help our financial position.”

Inglis also noted that council has put a new focus on building up reserve funds. “If we can achieve those surpluses over the next few years then that will help reduce our need for debt. That will put us in a better financial position for the future.”

The unanimous vote was for first three readings; final adoption is most probably just a formality.

To review the entire document, see item 8a on this May 8 council agenda.



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