Williams Lake city council voted four-to-three in favour of a six per cent overall tax increase for the 2024 budget at their Feb. 13 regular council meeting.
This was in line with a recommendation from staff, after a financial report by Vitali Kozubenko, the city’s chief financial officer, which shows the city significantly drawing down its reserves within 10 years unless the six per cent increase was adopted.
The increase will mean just under an estimated $110 per year per household or $9 per month, using an average house value in Williams Lake of $365,653.
A second option, a three-per cent increase, would have put the city at an estimated $3 million in reserves by 2028. In order to meet their budget for 2024, approximately $8 million in projects is being deferred until 2029. Drawing down the reserves to only $3 million when $8 million in projects would be on the list to be completed was not sustainable, staff advised.
The city’s total operating budget for 2024 is around $38 million.
After hearing a delegation from Atlantic Power announce the possible closure of the plant in 2025, the city’s largest single tax payer, at the committee of the whole meeting on Feb. 6, Coun. Scott Nelson said the city needed to plan for the future.
Later on, during the budget debate, Nelson argued the remaining reserves with the three per cent tax rate increase would still be in line with city policy on maintaining a reserve for contingencies, and 2029 is a long way off. He said with tough economic times for residents, he would prefer to see the three per cent increase instead.
“I’m just being very cautious this year,” he said, noting he thought the focus should be on growing the city.
Coun. Joan Flaspohler said the very reason Nelson was suggesting not increasing taxes were the reason they should be trying to maintain reserves, with the potential for drops in revenues.
“We are number one, supposed to be responsible for this community,” she said.
Coun. Angie Delainey said she supported staff as the financial experts in putting the city on the right path.
The financial plan includes deferral of projects until the next fiscal year or further, and while Mayor Rathor admitted these projects will not get cheaper in the meantime, he was hoping to avoid higher rates for residents.
The city’s budget going beyond 2024 would not yet take into account the possible loss of the city’s largest single taxpayer, Atlantic Power’s Williams Lake power plant, which pays around $1.2 million in taxes annually plus $500,000 in utilities. A solution to keeping the plant open may still be found so planning for this potential loss of revenue to the city has not taken place and the city only recently had confirmed news of the possible closure.
Coun. Flaspohler asked a number of questions of staff about the deferred projects, including an update to the Emergency Management Plan (EMP), which has not been redone since 2010, she said.
After staff explained their reasoning for some key deferrals, Flaspohler said she was satisfied, though she emphasized the importance of an EMP.
Coun. Jazmyn Lyons said with all the deferred projects and the potential risks to postponing them, the city should have reserves in case of emergency.
Coun. Sheila Boehm said she felt the reserves were there to carry them through and if needed, the city could borrow.
Coun. Nelson, Mayor Rathor, and Coun. Boehm voted in favour of a lower tax increase of three per cent but were defeated in their motion at the committee of the whole.
Coun. Delainey, Coun. Lyons, Coun. Flaspohler and Coun. Moses all voted for staff’s recommendation of a six per cent tax increase, with Rathor, Boehm and Nelson voting against. The recommendation was then passed at the regular council meeting on Feb. 13, with the vote remaining the same, four-to-three.
The city will be hosting a budget information session at the Gibraltar Room on March 14 from 3 p.m. to 6 p.m. to provide an overview and answer questions as well as receive feedback.
READ MORE: Williams Lake power plant, city’s biggest tax payer gives notice
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