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Tacking 'Big City Issues': Keeping Taxes Low

Tacking 'Big City Issues': Keeping Taxes Low

My stance on taxes is keeping them as low as possible.  Sure of course that is what everyone says but here are my top 4 ways to work our budget and planning to ensure we can do that.

1. Capital and Operating

When budgeting, it is imperative to break out capital and operating separately in order to be able to “play” with the budget and still complete the essential projects.

In the past the City of Spruce Grove did not do this and past councils did not have the flexibility to amend the individual projects.  Instead the changes were only if a project was above the line (in) or below the line (out).  I am proud to say that I led the charge to make this happen and our corporate planning sessions now break these out which allows us to massage the overall budget more.

2. Spring Budget Adjustments

Every year in November Council determines the tax rate based on the budget which includes estimates and an amount to be collected for growth.

In the spring, depending on the budget, actual tender amounts, and the growth rate, the city may need to collect more money.  This does not change the tax rate as the new growth is paying for the extra as they were not accounted for.  So the tax rate stays the same and the city collects more money to be put in a reserve for future needs based on the growth.

In the past the city has not done spring budget adjustments and thus has missed on collecting the appropriate taxes from the new growth.

Since joining council in 2017, I have been pushing for a spring budget adjustment and I am very proud to say this last print was the first time we completed one.

3. Off-Site Levies

Off-Site Levies are charges to bare land when they are being developed to ensure that the development is paying for their new infrastructure needs.  For many years the city has been collecting for water, storm, sewer and roads.

In the last few years the province has allowed municipalities to collect for Police, Fire, and recreation facilities.  I have been pushing for administration to bring to council the numbers so council can decide if we should start charging these levies.  Again, the charges are to current and future development for future needs.  Example, if we need a second fire hall we can start collecting from new development such that when we are ready to build we do not need to turn to the current tax payers for the full amount.

4. Service Levels

Looking at service levels of both operating and capital projects can really help reduce budgets.  The following are two ways to look at/change service levels:

A. Operating projects, such as snow removal or grass maintenance.  Currently as stated above, administration presents a single budget line item that is in or out.  I am proposing looking at different service levels in order to keep the project in, just at a difference cost.

For example:

Option i. Cut grass once a week = $1 million
Option ii. Cut grass twice a month = $750,000
Option iii. Cut grass once a month = $500,000

Presenting to council in this manner will help tell the story.  If our public engagement wants Cadillac services, then the tax will show that.  If the public engagement says we will accept lower service levels with lower taxes, we would now have the ability to do so.

B. Capital projects are along the same line as operating however the way to lower the capital project is often to spread it out over more years.  My example on this one is missing sidewalk linkages, to complete them all up to-date will cost $2 million but if we do it over 3 year or 5 years or maybe even 7 years.  We are planning to catch up on the missing sidewalks and the cost per year depends on the length Council chooses to complete.

Looking at individual projects this way is crucial for Council to understand the projects, the total budgets and the total tax implication.

Implementing and utilizing all these mechanisms will ensure that council is able to complete projects, take care of our city, be financially accountable and keep our taxes at the lowest rate possible.

By implementing these four changes, we will effectively be able to keep taxes low, be more transparent with budgeting, and make tax collection more fair for everyone.