It’s taken several months of debate but the District of Houston council has agreed to raise property taxes by 3.5 per cent this year.
The decision, reached at council’s April 16, could be called a compromise between councillors who began tax deliberations last year by opposing any increase to those wanting a four per cent hike based on expenditure provisions presented by District staffers.
The April 16 debate began with comments tied to the prospect of a 2.8 per cent increase that was backed by Councillor Tom Euverman. He felt a 2.8 per cent increase was reasonable as it would be more or less the rate of inflation this year.
Euverman’s proposal for a 2.8 per cent increase was accepted at the last council meeting and staffers then worked it into a document presented on April 16. The document cut costs that were in a proposed budget requiring a four per cent hike.
In looking at the projections, Councillor Troy Reitsma registered his objections, saying that one of the cuts would only harm taxpayers later on.
That cut was to reduce the annual injection $100,000 into an account to replace a fire truck when necessary to only $55,000.
That would mean taxpayers would then have to pay the interest on borrowed money to ensure a truck could be replaced when necesary, Reitsma said.
And not replacing fire trucks as they get older risks insurance companies charging far more more coverage than would otherwise be the case.
“So I think most people would rather pay an extra 50 or 100 bucks a year in property taxes then pay an extra eight or $10,000 a year in insurance,” Reitsma said.
Other proposed cuts included eliminating the $25,000 a year to replace playground equipment and $61,440 a year that normally would go into a capital works reserve. That would bring the total reduction to $131,400 which is actually more than the $111,440 needed to reduce the tax increase to 2.8 per cent.
Reitsma also said not putting money into a capital works reserve means having to borrow money to replace equipment.
“In all honesty, the difference in price for an average house to go from a 2.8 per cent in property tax increase to a four per cent property tax increase in my calculations, and it can be wrong, is 35 bucks a year,” Reitsma added.
“I just can’t support a 2.8 per cent increase because I just feel that the community is going backwards.”
Mayor Shane Brienen agreed with Reitsma, saying the District has already reduced revenue projections by freezing recreational user fees and is faced with rising fuel and energy costs in addition to negotiating wage increases for its employees.
“I’m a little concerned that we’re a little low and I don’t think I can support 2.8 per cent as well,” he said.
Councillor Rebecca Hougen favoured the 2.8 per cent hike proposal, saying that while reducing the amount being tucked away to replace a fire truck is unfortunate, that difference could be made up when Houston gets its share of a resource benefits grant announced by the province earlier this year.
“So I don’t think it needs to come out of our residents’ pockets,” she said of the fire truck savings account.
Brienen then warned Hougen that the resource benefits money could not be used to lower taxes.
Councillor Tom Euverman defended his 2.8 per cent increase plan by noting the proposed reduction could be more than covered by the District’s historical ability to register a surplus each year.
“We always project to be really conservative in terms of revenues and expenditure so in all likelihood that’s going to be the same thing,” he said.
“I think we owe it to the people that paid the bills to not do any more [of an increase] than the rate of inflation.”
The vote on the 2.8 per cent increase was defeated with Mayor Shane Brienen and Councillors Troy Reitsma, Jonathan van Barneveld and Tom Stringfellow opposed with Councillors Tom Euverman, Rebecca Hougen and Lisa Mueller in favour.
That then resulted in a motion proposed by Hougen and van Barneveld for a three per cent increase. In many ways it keyed off a suggestion made earlier by van Barneveld to split the difference between a 2.8 per cent hike and one of four per cent.
Reitsma continued his worries about finances indicating that the District’s proposed five-year financial plan calls for it to draw $500,000 a year from a special reserve account beginning in 2025 to provide enough revenue.
He said that once the new Canfor mill was up and running he’d be in favour of using that reserve account for a low tax year but until then, advocated for a tax hike of four per cent a year.
“I just think 3.5 is too low,” Reitsma said.
When it came to a vote for a 3.5 per cent increase, Hougen, van Barneveld, Euverman, Stringfellow and Mueller voted in favour. Brienen and Reitsma were opposed.
The motion means the required bylaw was given second and third readings. It returns May 7 for final adoption.
It will take the form of a five-year financial plan with 2024 being the first year.
A bylaw to set the tax rate was given first and second readings April 16 as well and it will return for passage at the next council meeting. There was no opposition to the resulting bylaw to set the tax rate.
Also agreed to was an adjustment to tax payments from utilities. There is a maximum rate allowed under provincial regulations is the greater of $40 per $1,000 of assessed value or 2.5 times the business class rate.
Council has now directed that the rate be 2.5 times that of the business class, resulting in a slight increase in revenue.
While council has agreed to a property tax increase, it is just for municipal purposes. Taxes for the Bulkley-Nechako regional district, the Northwest Regional Hospital District and the school district are listed separately on the tax notices Houston property owners will receive.