The City of Revelstoke is looking to hold taxes flat while maintaining service levels next year, however residents may pay a high price for this in the future warns Graham Inglis, the city's director of finance, in his new financial plan.
"While this approach may be politically expedient, the loss of revenue from a modest increase will be felt for years to come," concludes Inglis in the 2016-20 draft financial plan, which is set to go in front of council on Tuesday, Oct. 13
The 2016-20 financial plan calls for no tax increase on all property classes, except utilities next year, but it calls for big tax and utility rate hikes in the future.
How big? The plan calls for a 10 per cent tax increase in 2017 and 7.5 per cent increase in 2018 to make up for the lost revenue and to pay for road work. As well, the water rate is set to go up by more than 25 per cent over the next five years, to $525 in 2020.
Inglis warns of pressure to maintain infrastructure. "In order to ensure that tax and rate increases are maintained at reasonable levels it will be necessary to continue to critically review both capital projects and service levels," he writes.
It means council will have to find savings in the future or reduce service levels if it wants to keep taxes low and address the city's infrastructure needs.
While no tax increases are planned for next year, the water and sewer rates are scheduled to go up by $10 each to $395 and $245 respectively. The sewage frontage rate is set to be increased by $0.10 per foot frontage and garbage fees will go up by $2 per household to $112.
The capital plan includes about a $900,000 increase in revenue in 2016, mostly due to higher transfers from other levels of government; a reduction in spending of $300,000, and a deficit of $260,000.
it includes an increase in capital spending to $6.3 million in 2016 from $4.1 million this year, however, half that increase is due to changes in accounting standards that includes things like vehicle leases as capital instead of non-tangible capital assets.
Most of the major capital projects included in the plan are already well known.
They include the Big Eddy Waterworks upgrades ($5.7 million from 2016–18) and extension of the water and sewer systems to the Thomas Brook area ($970,000 in 2016). Both projects require the approval of area residents and would be funded by them and other levels of government.
The $7 million arena roof replacement has been pushed back to 2020. The sewer outflow relocation remains in the plan, at a cost of $4.3 million, however city engineer Mike Thomas has indicated in the past he hopes to avoid that project if he can.
The Downie force sewer main is scheduled to be replaced at a cost of $1 million from 2016-18.
$1 million is budgeted for fire flow projects over the next four years and $5.8 million for road work over the next five years.
Surprisingly, city hall renovations remain in the budget at a cost of $1,335,000 over the next five years.
The detailed capital plan has not been released.
The financial plan calls for long-term debt to remain steady at about $16 million until 2019, followed by a sharp spike in 2020 if the city goes ahead with the arena roof replacement.
Departmental budgets were devised over a series of committee meetings in August. Council will discuss the plan at its Oct. 13 meeting.
A timetable by the finance department calls on council to adopt the plan by the end of this year.
You can read the full draft financial plan below.