Nanaimo city council is ready to go ahead with a draft budget that will require a 7.3-per cent tax increase in 2023.
Council held an e-town hall meeting Monday, Dec. 5, to receive public feedback on the 2023-27 financial plan, then approved all 10 of the finance committee’s recommendations regarding line items in the plan.
Budget deliberations began in November with a 6.2-per cent property tax increase as a starting point, but the finance committee recommended numerous additional business cases presented by city departments. The most significant new spending in the budget is implementation of a fire master plan that will include the hiring of 40 firefighters over the next two and a half years, plus $4.3 million in capital costs for two new fire trucks and related fire hall modifications.
The committee also recommended hiring 11 other new staff members – some of them temporary or training positions – across various city departments.
Laura Mercer, the city’s director of financial services, told the finance committee that following the projected 7.3-per cent property tax increase next year, the starting-point tax increase will be 6.9 per cent in 2024, then 5.2 per cent in 2025. All of those figures include an automatic one-per cent tax increase for asset management.
Citizens challenge council on spending priorities
Many of the questions at this week’s e-town hall meeting related to public safety, homelessness, addictions and social disorder. Mercer said the 2023 budget, when compared with 2022, includes a $5.6-million increase to public safety spending.
“I think I can safely say that the most substantive portion of the potential … tax increase for this year’s budget relates very directly to public safety initiatives,” said Mayor Leonard Krog, pointing to the additional firefighting resources plus new community safety officers and RCMP officers.
Coun. Ben Geselbracht added that the city’s response to homelessness, addictions and social disorder causes increased costs every year and said “we are investing a significant amount of our budget on dealing with it downstream” while also working on upstream solutions such as securing land for housing.
Councillors debate dipping into reserves to lower taxes
At the final special finance committee budgeting meeting Dec. 1, city councillors debated whether to use reserve money to lower the potential property tax increase for residents. Coun. Janice Perrino made a motion to recommend spending $1.5 million from the special initiatives reserve to lower the property tax increase by 0.3 per cent.
“For young families, I can’t imagine how they’re coping this year. I just can’t imagine it,” she said. “The inflation and food costs, it’s an ugly situation out there … I want to do everything we can to reduce the taxes.”
However, the majority of council opposed the motion. Geselbracht said it’s an “important conversation” and said the city is working hard to keep taxes down while maintaining service levels, but said by moving around reserve money, “eventually you’ve got to pay for it at some time.”
Coun. Tyler Brown said it will always seem like the right year to dip into reserves to lower taxes.
“Decide what you want for a service level for the community and have courage in that conviction to tax accordingly,” he said.
Coun. Erin Hemmens agreed, and said as someone raising a young family, she knows not to dip into savings to pay bills.
“We have to raise the money that matches the level of service that we have determined for the city, otherwise it’s a shell game,” she said.
Perrino’s motion failed 6-2, with councillors Geselbracht, Brown, Hemmens, Paul Manly, Ian Thorpe and Hilary Eastmure opposed and Sheryl Armstrong absent.
Immediately following that discussion, Brown made a motion to increase the budget for unallocated pedestrian improvements from $300,000 to $1 million in 2023, to be funded from the strategic infrastructure reserve. The motion was debated at the finance committee table Dec. 1 and then again at the city council table Dec. 5 and ultimately passed 5-4 with Perrino, Thorpe, Krog and Armstrong opposed.
The draft financial plan will return to the council table Dec. 19 for three readings.