The budget was set and passed, and then council, after reviewing the tax situation here in Tumbler, reopened the debate last weekend.
The financial plan for 2013 has now been passed with a few changes which are going to lower municipal tax levies and adjust the surplus allocations.
A number of council members were unclear as to the financial implications that were to be realized across the various taxation classifications as a result of the tax bylaw adoption.
CAO Barry Elliott clarified this for council and explained the new water and sewer parcel taxes were new additional fees. Combined, residents will pay $165 annually to cover the parcel taxes for the municipal district. Parcel taxes are to cover the cost of the water and sewer infrastructure. These are now in place.
Any property that is capable of hooking up to the water and sewer will be taxed, regardless of whether they are using the system.
Elliott says, “It became apparent there was a misunderstanding on exactly what the implications were going to be to the average person. Some believed if your assessment stayed the same, you would be paying the same overall taxes for the municipality portion as last year. It wasn’t going to be because we added the new parcel taxes. The mill rate would stay the same but adding the new parcel taxes at $165. When we did the calculations on the average property it came out to about a 12 percent increase.”
He continues, “We did agree we wanted a zero percent increase on overall municipal taxes. The three classifications of property that were affected by the parcel taxes, we had to reduce them.”
By reducing the residential classification by 18.75 percent, business by 9.15 percent and light industrial went down a tad, just over one percent, that reduces the average bill by the $165.
This left the budget with a shortfall of about $324,000.
Elliott says, “Council agreed in the new bylaws to take that amount from the 2012 general surplus. We have a surplus of over five million dollars. Now we are taking about 1.2 from that surplus, which still leaves us with a healthy surplus. Frankly when the auditors were here, they suggested you don’t want to have too big of a surplus because it just draws attention to the municipality and they look at that when they start looking at grants.”
This brings council’s use of surplus this year to $1,225,509.
With the parcel taxes now in place, in future tax talks, council simply has to adjust municipal taxes.
Elliott says, “We don’t expect the parcel taxes to change, but every year we will review them to see if they need to be adjusted. We don’t expect them to be bouncing around.”
CFO Candie Laporte explains, “When you look at a single family home, there will be a net increase of 5.33 [with the regional and hospital taxes included], but when you look at single family only, there is actually a drop of 1.06 for municipal taxes.”
Due to this new understanding CFO Candie Laporte redrafted the 2013-2017 Financial Plan Bylaws and the accompanying Tax Rates Bylaw to reflect a zero percent overall increase to those property classes that are subject to the new parcel taxes.
The mill rate is the rate at which you are taxed. For every thousand dollars, you pay the mill rate. For example, for residential municipal land and improvements, the mill rate is 3.8941. It was 4.7928 before the adjustments were made. This means if your property was assessed at 200,000, you would pay $778.82 in this column of taxes.
Even with these drops, there is still going to be a 13 percent increase to property taxes as a whole for municipal district due to the increase in market growth. The district set the rate to adjust for increased assessment before they talk about tax rates.