Lantzville’s budget talks starting with potential 22.5-per cent tax hike

After years of relatively low tax increases, Lantzville residents can expect a major hike this year and likely in the years to come.

At a committee of the whole meeting on Oct. 28, Jamie Slater, the district’s director of financial services, unveiled Lantzville’s proposed 2020-2024 financial plan, which calls for a 22.5 per cent residential property tax increase in 2020. She said the hike is because next year’s budget has an increase of $432,000 in expenses.

“It has been a challenging budget year,” Slater told councillors.

Slater said if the 22.5 per cent tax increase is approved, it would result in the average household paying approximately $171 more in 2020. She cited wage increases as a result of the municipality’s new union agreement with CUPE, additional staffing requests, and a $125,000 increase to the snow removal budget as some of the reasons for the rise in spending.

“We have been consistently spending more than $50,000 in snow removal,” she said. “Actually, we’ve depleted our snow removal reserve so there are zero dollars in our snow removal reserve right now.”

However, Slater’s biggest concern was around the district’s lack of infrastructure funding, particularly when it comes to roads. She told councillors the amount of money the district needs to spend on roads is “relatively terrifying” for councillors.

“We haven’t been putting enough money away to meet our average needs,” she said.

Lantzville has an annual infrastructure funding shortfall of $606,000 according to a report attached to the 2020-2024 financial plan, which shows $5.5 million worth of road replacement or upgrade projects scheduled over the next five years.

During her presentation, Slater told councillors that Lantzville needs to spend about $10 million over the next 10 years in order to replace and upgrade its existing road network. She said that even if the district were to allocate an additional $450,000 each year towards funding road works, Lantzville would still be short by $8 million.

“I’m sure you don’t need me to tell you that is a large, large funding gap.”

Between 2005-2019, the district’s road reserves were underfunded by $5.4 million according to Slater. She said the district only has around $1.2 million in reserves to cover the millions of dollars in necessary roadwork.

“We are going to end up in a deficit position very, very quickly,” Slater said. “We have a roads problem and it is not a long-term problem, it is a very short-term problem.”

In fact, Slater said the situation has reached the point where it wouldn’t really matter how much money the district threw at it, the problem would still exist.

“Essentially, we could put as much money as we possibly could into roads and it probably wouldn’t quite be enough,” she said. “It is definitely an area that needs to be our focus.”

Lantzville Mayor Mark Swain, who was a member of the previous council, said the news about the “grossly underfunded” infrastructure in the district doesn’t surprise him.

“It is no great surprise we are in the situation we are,” he said. “Now, we will have to deal with it as a council.”

Swain said council is going to have to rise to the occasion and deal with the situation, which could mean more tax increases in the years ahead.

“That’s the reality we are facing and it is a brave endeavour we are on but it is the right endeavour,” he said. “Hopefully we can correct things moving forward. It’s probably going to be a couple years of this. Maybe not 20 per cent increases in successive years, but this is where we are at.”

Coun. Will Geselbracht, who was also a member of the previous council, said he doesn’t remember road replacement and the lack of funding for it being a serious issue in the past.

“We have patted ourselves on the back for having the lowest tax rate, mill rate in the whole region,” he said. “Well, there was a reason for that. We didn’t keep an eye on the ball and the ball was infrastructure, roads, sewer, water.”

He said he hopes council has the “political courage” to make tough decisions and move forward.

“I will be walking down my street with my helmet on,” Geselbracht said.

Coun. Jamie Wilson suggested the district put together a video to effectively communicate to residents the reasons behind the tax increase because it is “a big jump.”

“I don’t think we need to drag the previous council through the mud. I think we can look at the positive and say, ‘look at how much over the previous years that the past council saved you.’ Now, we ultimately have to buck up and pay up,” he said.

Council is working through the budgeting process and has yet to approve the 2020-2024 financial plan. Another committee of the whole meeting is scheduled for Nov. 4.