Council holds Corp Plan tax increase to 3.9 per cent

The City of Spruce Grove adopted the proposed 2020-2022 Corporate Plan during their regular meetng monday. The plan includes an increase to residential taxes of 3.9 per cent. File photo

Share Adjust Comment Print

The City of Spruce Grove has adopted the 2020-2022 corporate plan with a tax increase of 3.9 per cent, and a step back on City projects.

Council adopted the Corporate Plan and the 2020 budget, with revenues of $118,628,135, expenses of $102,066,120, net capital acquisitions of $15,393,339, and a transfer to the accumulated surplus of $1,168,676 during their regular meeting on Monday.

“The 2020-2022 corporate plan is a reflection of where the city is today. We are still responding to significant growth, and we’re seeking a clear understanding of our fiscal realities and future,” said Emily Strach, manager of corporate planning for the City of Spruce Grove.

After a few years of steady develop,net which saw the creation of the new Protective Services building, a new RCMP facility in partnership with the Town of Stony Plain, and improved underground infrastructure for transit, the City is in a time of transition.

Growth rates have been on on the rise, as has the CIty’s debt servicing costs. These factors combined with inflation and additional staffing requirements to respond to growth in previous years and the creation of a local transit service have had significant impact on the City’s financial position.

As a result, administration originally suggested raising the outlined 3.9 per cent tax increase to 5.3 per cent. Council stressed concern over the perception of putting the brunt of the burden on residents and opted instead to keep with an increase in residential taxes of 3.9 per cent as outlined in the original draft of the 2020-2022 corporate plan.

“I am in support of the budget but I do have one major concern,” said Coun. Wayne Rothe. “I feel that we need to become increasingly cognizant of this current financial reality. This worries me a great deal. I worry we’re either going to have to shelve significant projects, or we’re going to have to consider significantly larger tax increases than 3.9 per cent.”

Knowing the City’s financial position, department s were directed to review their projections for 2019 in an effort to find cost savings where adjustments are possible. Adjustments in 2020 amount to $1.3 million in budget savings, $400,000 in deferred items,and  $356,000 in forecast corrections. In 2020, an additional $500,000 in budget cuts are included in the plan along with another $1.3 in deferred items.

Piling on to their financial position, recent changes to the provincial budget have lead to a $656,000 shortfall in fine revenue, resulting from a change in provincial government collection from 26.7 per cent to 40 per cent. The City found $45,000 in savings from the budget because there is no longer financial benefit of holding a census as provincial funding models use federal numbers. As a result the City will not hold a census in 2020.

There will be a $90,1000 shortfall in revenue for public transit as a result of the Alberta Community Transit Fund Grant. The Shortfall is going to be absorbed by MSI funding.

“I love the approach we’re taking in a reframing year but the reality of the situation is the provincial budget is going to have an impact on us,” said Coun. Michelle Gruhlke. “When you look at the 2.7 per cent of our overall budget that’s affected, it’s striking. Im definitely in favour of going with a 3.9 per cent tax increase, but I’m also a little disappointed to see we didn’t go with option two.”

The increase in taxes to 3.9 per cent is equal to a monthly increase of $7.37 per month per household with an assessed value of $364,500. Fees for water and sewer will go up by $1.67 per capita per month while newly created storm utility fees will cost $7.30 per capita per moth. Natural Gas Franchise fees represent the final monthly increase at $2.27 bringing the total impact on residents to $18.61.

Some councillors echoed Rothe’s statement in fear this might not be enough with possible further increases on the horizon.

“I’m a little concerned we decided to go with the 3.9 per cent increase. I feel we could be kicking the can down the road a little bit here,” said Coun. Erin Stevenson.

Despite concerns, many were not comfortable with a further increase at this time. Council ultimately unanimously voted in favour of adopting the 2020-2022 corporate plan as presented.