Red Deer residents and businesses will see their tax bills rise an average of 2.6 per cent this year after council unanimously passed the city’s smallest tax increase in 10 years on Monday.
The average tax increase will apply to non-residential property owners as well as residential property owners, with the exception of multi-family dwelling owners who will pay an average of 6.9 per cent more in taxes this year. They would still pay on average a lower tax bill than the other residential owners.
Last year’s property tax increase for residents and businesses — which included the educational portion — was an average 5.5 per cent.
An average residential property assessed at $300,000 will pay $2,346 compared with $2,286 last year, or a $60 increase in taxes.
“While many residential property assessments went down this year, that doesn’t mean residents’ property taxes will go down too,” said Joanne Parkin, Assessment and Taxation manager. “A decrease in your assessment does not equal a decrease in your property taxes.”
Council supported the increase after months of deliberations into how best to toe the line on capital and operational spending.
Dipping into municipal reserves was a main reason why the City of Red Deer was able to reduce the tax increase and yet come out with a higher operating budget of $232.7 million instead of the earlier projection of $221 million.
The implication of a smaller tax increase means the city will focus more on infrastructure essentials and less on glitzy ones, and operation wise, the city elected not to hire additional fire-medics or Mounties.
Parks may not be maintained as well, and some lines on road may not get painted as regularly.
Mayor Morris Flewwelling said people should continue to receive “very good level of services they have come to expect.”
“It doesn’t lead to any direct cuts, but it’s business as usual,” said Flewwelling outside council chambers.
Councillor Larry Pimm said he recognizes some people will find even a small tax increase challenging.
Property tax notices will go out the end of May, with tax payments due on or before June 30.
While the tax increase is relatively small, user fees increased even more. On March 1, fees for garbage collection, recycling, landfill, water and wastewater services rose — all in range of seven to 13 per cent.
The property tax increase takes into account the municipal portion of taxes, along with the amount of school taxes it must collect on behalf of the province.
With the blended municipal and education amounts, along with a requisition form the Piper Creek Foundation, the tax increase was reduced.
Several councillors expressed concerns with the $235,000 being sought by the foundation responsible for subsidized seniors housing. The city is required to collect these dollars, according to a ministerial order. The last time such an order came from the foundation was in 2003.
“It’s bittersweet because we don’t have any control over it,” said Councillor Cindy Jefferies. “But this is a community need.”
Councillor Lynne Mulder wondered about what kind of accountability measures were in place, considering there was only one city councillor represented on the foundation board.
“The current structure of the board was really determined by council 10 years ago now,” said foundation executive director Geoff Olson. “We’ve been very comfortable with that. The public should understand our operations are independently audited every year and those are reviewed by the city and the provincial government.”
Olson said the money is needed because of lower revenues and higher expenses, resulting in operational losses. As well, it’s trying to build up a reserve fund for maintenance.
He anticipates the foundation will come back for more funding in the neighbourhood of $300,000 next year.
ltester@www.reddeeradvocate.com