City of Powell River councillors have given first reading to the city’s draft five-year financial plan bylaw for the years 2024 to 2028 inclusive.
At the February 27 special council meeting, chief financial officer Mallory Denniston outlining the draft bylaw, said since launching the budgetary process in August 2023, the city has completed an online and in-person budget engagement, set utility and parcel tax rates, presented draft one of the financial plan, completed an in-depth cost-savings proposal and an in-depth analysis of the 2024 property assessments. Denniston said what was being presented to council was the second draft of the financial plan, which includes all changes recommended since November 2023. She added that changes can still be made to this bylaw after the first reading and before the second reading.
Denniston said her written report to council focuses on the five-year financial plan, which will establish the property tax revenue the city is required to collect in 2024.
“Once this amount is known, the property tax rates will then be proposed in March,” said Denniston.
She said property tax rates used in her report were estimates for purposes of showing the high-level impact of the property tax revenue on an average single-family dwelling.
“In other words, it’s to boil down what $24 million in property tax revenue means for an average single-family dwelling,” said Denniston. She said that any reference to an average single-family dwelling cost was a high-level estimate.
Denniston stated in her report to council that property tax revenue decreased by approximately $300,000 (1.3 per cent) due to cost savings initiatives directed by council at the January 23 special council meeting. She stated that a decrease in property tax revenue is a savings for residents since it decreases the amount of property taxes that the city will collect.
She said the city’s property tax revenue increased by $1.6 million, which has come from the Catalyst Paper revitalization tax bylaw having expired in 2023, resulting in the company having to pay more taxes. It has been recommended by Denniston to put the money in a property tax stabilization reserve and saving it for the future when major industry might produce less revenue than is anticipated in 2024.
“Although there is a 15 per cent increase in property tax revenue, the average single-family dwelling will be seeing closer to a six per cent increase because of this positive shift in the assessment,” said Denniston.
She said that expenses have increased since draft one but this has not impacted property taxes. She said this is largely due to $700,000 in capital costs for software being reclassified as operating costs, because of software evolving from being purchased to being a subscription for cloud-based services. This does not affect taxation because it is reserve funded, said Denniston.
She then outlined estimates for draft two on an average single-family dwelling using 2023 tax assumptions. She said the city charges municipal property taxes and user fees on the tax notices, and also collects taxes for other authorities, such as qathet Regional District and qathet School District. Roughly 30 per cent of the total property tax notice is collected for other authorities, and the city retains roughly 70 per cent of the total property tax notice.
Denniston said the estimates for an average single-family dwelling, with the current assumptions, has property taxes increasing by $162, or 6.6 per cent over 2023, for a cost of $2,567, plus a $50 flat tax. Parcel taxes are increasing by $21 for sewer collection and treatment, for a total of $442. The user fee for sewer, water and solid waste collection is slated to be $662, which is a $42 increase over 2023.
“Altogether, the total estimated increase for municipal property taxes and user fees would be about $225, or 6.4 per cent, for a total cost of $3,720,” said Denniston.
“The property tax rates for other authorities are not known at this point, but estimates have been used based on draft information that is available at this point in the process. It is estimated that an average single-family dwelling would have an increase of $177, or 12.7 per cent in property taxes to other authorities, for a total of $1,566. Altogether, the property tax notice would increase by $402, or 8.2 per cent before the homeowner grant is applied.”
Denniston reiterated that the figures will be finalized later in the budgetary process and that the comparisons offered are for high-level demonstration purposes only, to put the financial plan into context for taxpayers.
Council voted that the draft City of Powell River five-year financial plan bylaw 2742 be read a first time, with councillor Jim Palm opposed.
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