The District of Houston council failed April 18 to give third and final reading to a financial plan bylaw calling for a 4 per cent tax municipal property tax increase this year.
With Councillor Tom Stringfellow absent, the motion to give third reading resulted in a tie with Mayor Shane Brienen and Councillors Troy Reitsma and Jonathan Van Barneveld in favour and Councillors Tom Euverman, Rebecca Hougen and Lisa Mueller being opposed.
A tie vote meant the motion failed and that now sets the stage for another attempt at third reading when a full council attendance is assured.
By provincial legislation, municipal governments must have their budget bylaws in place by mid-May. The bylaw contains not only this year’s budget but proposals for the next four years.
The three council members voting in favour of the bylaw cited the need to keep up with inflation and the need to have sufficient monies for municipal infrastructure and reserves as key reasons for wanting approval.
The three councillors opposed said 4 per cent was too much given the financial impact on the community resulting from the closure of Canfor’s sawmill here and the uncertainty as to whether the company will build a new one.
“If we do not move forward with our town, we are going to fall behind and we are going to die. That is why I am pushing for a 4 per cent tax increase,” said Reitsma, adding some people have called him an “arrogant jerk” for his position.
He added that while residents have said Houston should not be compared with other local governments, he pointed to the situation in Smithers.
“In the last three years it has increased their taxes 30 per cent. We’ve increased our taxes eight. That is a good news story. That is something we should be proud of.”
Van Barneveld called 4 per cent an acceptable mid-range between inflation at 8 per cent and not raising taxes at all.
“I kind of view this budget as a caretaker budget, because the sad truth is we have to set this rate prior to the announcement,” he said in referring to the June-July period when Canfor has said it will decided whether it will build a new mill or not.
“I think post-July, when there is an announcement, regardless of if it’s positive or negative, at that time, I think council could probably take another look at the budget and readjust priorities within it,” Van Barneveld added.
He also said not keeping up with inflation would be an irresponsible way of managing the district’s assets.
And to bring investors to town, Van Barneveld continued, you don’t what a town of “tumbleweeds and chipped paint and dilapidated buildings.”
Brienen said he appreciated that his backing of a 4 per cent hike may not be popular given the uncertainty of the Canfor mill closure but reminded council members of what happened in 2014 when Houston Forest Products closed.
“I can tell you in 2014 we hardly got a dime from the province and the federal government,” he said.
And he noted that senior government grants are financing 85 per cent of the cost of the the 10th Ave. revitalization work and other major projects this year.
Brienen also pointed out that proposed projects in the financial plan for the years after this year, mainly a new community hall and an updating of Jamie Baxter Park, are not set in stone.
“I wouldn’t get too worried about that,” he said. “The only way that’s happening is if some major, major grants cover almost the full cost of it.”
Mueller advocated for a 2.5 per cent hike, which had been proposed at the very beginning of council’s budget deliberations.
“I just think we’re in a space of hard times right now,” she said. “And I think that there’s too much unknown.”
Mueller suggested the District could make up for a 2.5 per cent increase now in future budget years.
Hougen followed Mueller’s comments, saying that this year just might be the right year to hold off on a rate higher than 2.5 per cent because of the Canfor closure uncertainty.
“We’re in a position where, you know, if the province or the federal government isn’t going to give us any help, and we don’t know what the future is going to bring, maybe this is the position for the municipal government to hold off for this year,” she said.
“Man, I love the idea of new taxes, but I also don’t see that as a feasible, fiscally responsible way to keeping order so I agreed with the 2.5 per cent,” Hougen added.
Euverman, the third councillor pushing to limit the hike to 2.5 per cent, said municipal property taxes are just one portion of a larger bill sent to homeowners each year.
Water, sewer and other user rates are also rising, he said.
And the new Mills Memorial Hospital now under construction in Terrace at a cost of $632.5 million means a further tax increase for local residents because Houston is part of a regional hospital taxation district that stretches right to Haida Gwaii.
If another attempt at third reading of the financial plan bylaw calling for a tax increase is successful, council will then move to final adoption. It must also then pass a bylaw setting the exact tax rates for each property classification.
The deadline this year to have all of the relevant bylaws in place before May 15.