City staff reveals provisional 2013 budget

NANAIMO – Addressing future infrastructure needs, strategic plan top priorities

The city’s 2013-2017 provisional financial plan arrived on the desks of city council Monday with two notable differences from past years – a one-per cent tax-rate increase built in for all property classes to address asset management for each of the next five years, and budgeting prioritized to match the city’s Corporate Strategic Plan, adopted in July.

Brian Clemens, the city’s director of finance, said the one-per cent tax-rate increase bumps the proposed residential tax rate increase to 3.3 per cent, the commercial rate to a 2.6-per cent increase and the major industrial rate to a 16.4-per cent rate decrease, but over five years, if approved by council, will generate an additional $14 million to help pay for future replacement and repairs of water mains, sanitary sewer, storm drains, transportation, buildings, parks, vehicles and information technology.

“Not doing or delaying an increase means we will always be reacting to asset management costs as they come up instead of being proactive,” said Clemens.

Until now, asset management has been underfunded in previous budgets, resulting in a shortfall of millions of dollars every year to maintain $2 billion in city assets.

“We’re building reserves to assist in replacing or retiring assets when they reach the end of their useful life,” said Clemens.

Across the country, municipalities are facing an estimated $123-billion infrastructure funding shortfall.

Sewer and water rates are also proposed to increase.

To help fund several expensive water projects, including the new $62-million water treatment centre, water user rates will increase an additional 2.5 per cent on top of the five-per cent annual increase already planned and for three years beyond this financial plan, though Clemens said that plan is flexible. The current proposal expects to raise $5.3 million over five years.

Sewer rates, which haven’t seen an increase since 1998 – they’ve actually decreased twice since then, amounting to 10 per cent – will increase five per cent for each year of the plan, collecting $3.8 million.

Mike Delves, chairman of the Greater Nanaimo Chamber of Commerce, said addressing the city’s future infrastructure needs is a good step.

“We appreciate the thoroughness it appears they’re going into, and we’ll find out more about that at the January meeting,” said Delves. “These are the right steps from our point of view, and we’ll have a better idea of how much we like it once we get further into the process.”

He added chamber representatives will continue to lobby for lower commercial tax rates – commercial business owners pay 2.64 times the amount of taxes that residential owners do for the same assessment.

“As far as where other communities are at we’re not doing terribly, but there is still room for improvement and reason for justification for returning the ratios to a lower amount,” he said.

“At the same time we know that’s a struggle for the city, the money has to come from somewhere.”

Removing two dams at Colliery Dam Park will cost taxpayers about $7 million, but that won’t be felt until the 2014 budget, where that project alone will result in a tax-rate increase of 1.6 per cent across the board to help pay down capital on short-term borrowing.

While asset management is the most notable nod to addressing the city’s strategic priorities, the budget also addresses the plan’s five other priorities, including waterfront enhancement projects, water projects, transportation and mobility (the city is currently embarking on a new transportation master plan), government taking responsibility and community building partnerships.

“In many cases these plans can be put into place within existing budgets,” said Clemens. “Others will require additional funding.”

So what does the proposed budget mean for homeowners?

Based on an average home assessed at $350,000 with a residential tax-rate increase of 3.3 per cent, a homeowner is scheduled to pay an additional $96.85 in 2013 over last year: $62.32 for city portion of taxes; $24.93 for water user fees; $4.85 for sewer user fees; and $4.75 for garbage user fees.

Homeowners won’t be able to calculate exact taxes until assessments are delivered by B.C. Assessment at the end of the month, and other taxes the city collects on behalf of the Nanaimo Regional District, regional hospital, school district, regional library, and other services won’t be known until later in the process.

Coun. Fred Pattje said council has a lot of work to do before the financial plan bylaw is passed in February and the budget is adopted May 15.

“We’ve got lots to read, lots to observe and lots of figuring out to do and as far as asset management goes, are we doing enough or are we just postponing the inevitable?” he said.

For complete draft budget information, please visit www.nanaimo.ca.

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