Revelstoke council puts $21.7 million budget out to public

The City of Revelstoke's proposed 2016 budget calls for tax increases that about match inflation, $21.7 in spending and a small surplus.

Revelstoke council has moved forward on its 2016-20 financial plan. It has now gone out to the public for comment.

Revelstoke council has moved forward on its 2016-20 financial plan. It has now gone out to the public for comment.

It’s amazing what an assessment can do. The City of Revelstoke was looking at posting a deficit this year, but that’s changed after BC Assessment re-classified the Sutton Place Hotel to commercial from residential. The move has resulted in a $1.2 million swing in expected tax revenue for the city and, even with the city hedging their bets by putting $750,000 into a reserve fund, the city now expects to post a surplus this year.

Revelstoke council is moving forward with a $21.7 million budget for 2016 that includes a two per cent tax increases for residents and one per cent tax increase for businesses.

The increase means someone owning a home worth $250,000 would see their tax bill increase by $25 to $1,245. Taxes on a commercial property of the same value would go up by $46 to $4,665. Water, sewer and garbage rates are all going up in 2016 to $395, $255 and $112 respectively. The sewer frontage tax is going up to $1.60 per foot of frontage from $1.50.

The 2016-20 financial plan will now go out for public comment before it comes back to council for adoption.

The discussion began with a presentation by Graham Inglis, the city’s director of finance. He went over some of the most significant aspects of the plan, including the changes that have been since discussions began back in early October.

This chart shows the breakdown of the $23.68 million in City of Revelstoke revenue. ~ Chart by the City of Revelstoke.

The biggest development is the re-classification of the Sutton Place Hotel. Since commercial properties are assessed at almost four times the rate of commercial, it means a potentially huge uptick in revenue for the city. However, because the city has been burned in the past by successful assessment appeals, council has chosen to put $750,000 into a tax equalization reserve in case Revelstoke Mountain Resort is once again successful in appealing its assessment.

Under the proposed budget, city tax property revenue will be a shade under $9.5 million, however total city revenue is $23.68 million when you add in things like grants & payments in lieu of taxes, transfers from other levels of government, and sales of services.

What we’re trying to find today is we’re trying to find what we think is acceptable for the plan, what we think is acceptable to council and what we think is acceptable to the community,” said Mayor Mark McKee during the lengthy discussion.

The debate Tuesday centred largely around the tax increase. The draft budget council was presented with called for no increases however council opted for a hike that roughly matches inflation.

Council spent a significant amount of time discussing tax increases. “I don’t want to have five per cent increase in 2017 because we did nothing in 2016, said councillor Connie Brothers. If we have to bite the bullet, then I want to know now as opposed to knowing next year.”

Council tossed around numerous scenarios. Linda Nixon proposed one that would have reduced the burden on light industry. This was in response to a letter from Bart Larsen, the owner of Mt. Begbie Brewery, who asked the city to look at the rate for light industry.

Aaron Orlando wanted to look at a scenario that would lower the tax ratio between businesses and residents. As it stands, the ratio is 3.84:1.

“We need to work to create a more competitive playing field for our businesses,” he said.

Inglis discouraged focusing on the ratio, noting that the fact residential assessments increased by more than commercial assessments meant that the tax rates were changing at different rates. “There’s a lot more speculation in the residential market. There’s very little speculation in commercial property,” he said. If assessment go up faster, the ratio can get wider.”

McKee agreed with Inglis. “If we can be working towards keeping the rate the same, knowing the assessment range is working against us, we’re in effect doing the same thing,” he said.

Trevor English said the tax increase should be the same across all classes. “I really hesitate to jump up residential property taxes without everybody shouldering a similar increase,” he said after proposing a one per cent increase across the board.

Council ended up agreeing on a slightly bigger tax increase for residential properties than business. McKee said it could be changed after the public comment period.

“I think we should come up with a scenario that will be acceptable by the community to start the discussion, knowing it will come back here to be fine-tuned,” he said.

What about spending?

Overall, the financial plan calls for operating expenses to remain steady at around $21 million for the next five years.

This chart shows the breakdown of the $21.73 million in City of Revelstoke spending. ~ Chart by the City of Revelstoke.

Here are some highlights on the spending side:

— One of the most notable change since the draft was presented is the addition of a 12th police officer to the RCMP payroll. That will cost the city $100,000 in 2016, and $120,000 in each of the next four years of the plan.

— Mayor and council voted themselves a raise. The mayor will now make $30,000 per year, up from $28,000; and councillors will earn $15,000, up from $14,000. It’s the first pay increase for council since 2011.

— The cost of the Trans-Canada Highway intersection upgrade has been increased to $1.1 million from $500,000. City engineer Mike Thomas told the Review that bump was made after a preliminary design for the intersection was drafted by a consultant. The funding for the work is coming from Development Cost Charges and not general revenue.

—  The city will be spending $60,000 on the city hall siding in 2016 after council decided to scale back that project. The money will go to inspect the exterior wall in order to get a better idea on what needs to be done in the future. The initial draft budget called for $540,000 to be spent on replacing the stucco.

— Public works has budgeted $140,000 for storm sewer expansion, $20,000 to complete the paving condition assessment, $70,000 for new lights on Fourth Street, and $20,000 for what they’re calling a ‘demonstration local street project.’ The latter would go towards small improvements, like improving bike safety on the Illecillewaet Bridge, or speed controls on Ninth Street near Begbie View Elementary, explained Thomas.

— The development services department has budgeted $60,000 for a zoning bylaw update, $40,000 for an Official Community Plan review, and $75,000 to purchase new permit tracking software they say will improve efficiency.

— The department of parks, recreation of culture is spending $20,000 on its ongoing playground upgrade program, and $60,000 on arena equipment upgrades. The arena roof replacement lingers in the horizon — it has been budgeted for $7 million in 2020, though a review of the entire arena has been suggested before things go ahead.

— There are four major water projects in the works for 2016. Two — the Big Eddy upgrades and Thomas Brook extension – require approval from residents before they can go forward. The Illecillewaet River pipe crossing, which was supposed to replaced in 2015, has been re-budgeted for 2016 at a cost of $650,000; and the broken water main under Alpine Lane will cost $235,000 to replace.

— Sewer projects include $120,000 to relocate the pipe under Third Street, and $145,000 to replace two lift stations. Money is also in the budget to begin work on two major projects — the $1 million Downie force main replacement, and the $4.5 million sewer discharge relocation.

— The cost of plowing the roads keeps going up. The city is budgeting $1,317,750 for snow removal in 2016 — up about three per cent from 2015. About 10 per cent of tax revenue goes toward snow removal.

You can read the full draft financial plan below.

City of Revelstoke 2016-20 financial plan. by AlexCooperRTR