Nanaimo city councillors began working on their next financial plan, and their starting point is a 6.2-per cent property tax increase.
The City of Nanaimo is holding its first of five special finance and audit meetings Wednesday, Nov. 23, as it works toward passing the first three readings of a draft 2023-27 financial plan bylaw before Christmas.
In addition to a projected increase in property taxes, user fees are also set to go up, with a projected four-per cent increase in sewer rates, a five-per cent increase in water rates and a 0.9-per cent increase in sanitation fees.
According to the city, the potential 6.2-per cent tax hike would increase the city’s portion of property taxes on a typical $718,000 home by $152, from $2,456 to $2,608. Municipal user fees would go up by $31 for a typical home. Those calculations include only city taxes and do not factor in the other taxes collected by the city on behalf of schools, hospital, and the regional district, for example.
Breaking down an average city tax bill of $2,608, the largest portion, $2,134, would go to city services, while $270 would go to reserves, $154 to projects and $50 toward debt servicing. Of the $2,134 for city services, the largest share, $576, would go to RCMP, then $389 to parks and rec, $319 to Nanaimo Fire Rescue and 911, $297 to corporate services and $241 to engineering and public works.
Laura Mercer, the city’s director of financial services, reported at Wednesday’s meeting that the most significant budget driver for 2023 is wages and benefits, which are going up $4.9 million. That includes seven new police officers, 12 community safety officers, four clean team members, seasonal parks attendants and six other city staff positions.
“The full costing of the downtown safety action plan that council approved was borne in 2023,” said Mercer.
Also, the RCMP contract is expected to go up by $2.2 million, while asset management accounts for a nearly $1.3-million increase.
On the other side of the ledger, higher interest rates will result in an increase of approximately $2.1 million for the city’s investment income.
“The city has been able to secure better rates on our investments…” Mercer said. “One of our investments just came due and it was at 1.5 per cent and we can go out and get over five per cent now.”
As always, various city departments will pitch business cases to council for new staff positions and other initiatives. Councillors will be asked to consider 11 new staff members, some of them temporary or part-time positions. The biggest-ticket business case that council will decide on is staffing new rescue units at Nanaimo Fire Rescue Station 1 and 2, which would have a 0.4-per cent impact on property taxes in 2023 and a 1.2-per cent impact in 2024.
Also not included in the budget are four potentially major capital projects: a new public works operations centre, a new RCMP detachment, an extension of the Harbourfront Walkway, and a south-end recreation centre.
Mercer reminded councillors that city staff build the budget from scratch every year.
“We start with approved wages and benefits, because we have contracts for those, and we build the budget up line by line from there,” she said. “Each manager has to justify each line in their budget.”
Members of the public are invited to provide input into the financial plan at an e-town hall meeting on Dec. 5 at the Vancouver Island Conference Centre’s Shaw Auditorium.
READ ALSO: Nanaimo city council getting started this week on next budget
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