City’s string of tax increases continues

Mayor Bev Buckway revealed a city budget Monday night that has residents forking over more money in property taxes and fees.

Mayor Bev Buckway revealed a city budget Monday night that has residents forking over more money in property taxes and fees.
The city is proposing a 7.5 per cent property tax increase to cover the needs of what Buckway called a growing city.
Buckway is also forecasting a subsequent four per cent tax increase for 2009 and 2010 as well.
‘The city always estimates increased tax due to residential and commercial growth,’ she said, reading from her prepared budget address.
‘The city’s 2008 growth estimate is 8.8 per cent.’
The budget document covers the $50,799,399 operating budget for 2008, and forecasts a capital budget through to 2011.
The budget unveiled a year ago was worth $41 million.
The budget received first reading Monday evening, and must still proceed through a public hearing and two more readings before adoption.
With the average home in Whitehorse costing $330,000, a 7.5 per cent property tax hike means the average annual tax payments go from about $2,500 to about $2,700, said Michael Racz, president of the Yukon Real Estate Association.
Buckway told the Star after Monday’s city council meeting, the last of 2007, that if residents staunchly oppose a property tax increase, they should tell council.
‘We are elected to make these decisions, and if this isn’t what they want, they need to tell us,’ she said. ‘If we start cutting property taxes down, we’re going to have to cut the services that people want.’
In making a case for the proposed property tax boost, Buckway referred to statistics indicating Whitehorse residents pay amongst the lowest property taxes in the country, while promoting the services provided by property tax dollars.
‘The city’s services are supported by four main sources of funding: property taxes, water, sewage and solid waste charges, program service fees and Government of Yukon grants,’ said Buckway.
Territorial funding has increased, she explained, by approximately $200,000 per year over the next five years, which is good news and greatly appreciated, she said. By the end of the five years, the territorial government will be transferring $7 million a year to the city.
The city is still raising fees on numerous services, including a 1.5 per cent hike in cemetery fees, a three per cent increase in sewer and water user fees, and a notable 8.5 per cent jump in solid waste disposal fees at the landfill.
‘These increases bring both water and sewer and solid waste to the 100 per cent recovery basis,’ she said.
The fee increases are necessary to break even with the cost demands of a growing city, she reiterated.
A large part of the city’s heightened costs, Buckway said, are labour costs.
‘Wages have gone up and we work in a union environment,’ she told the Star.
She identifies increased benefits and severance accruals, higher labour costs, and higher energy costs as the chief culprits for heightened city expenses.
Among all city expenses, however, the Canada Games Centre was singled out as a major spending vacuum.
Budget figures show the centre will cost almost $3million over-budget between 2008 and 2010.
City manager Dennis Shewfelt said although there aren’t many hard figures available, ‘it’s safe to say the centre is costing more than we thought it would.’
In the city’s third-quarter variance report, released two weeks ago, the city identified that spending in all departments had gone down except Parks and Recreation, which governs the Games centre. That department had a forecast budget surplus of $420,000 at the end of 2007.
Coun. Doug Graham has a history of questioning costs associated with the Canada Games and with the centre. He abstained from voting on the budget’s first reading.
‘I’m not going to vote for this budget unless some changes are made,’ he said.
The city is not going to make money off of the Canada Games Centre, he said, and city staff are getting wise to this. The problem with the budget, he says, is that his fellow councillors can’t say no.
‘I believe there are a number of items in this budget that aren’t a priority,’ he said. ‘At some point, you just have to say no.’
Robert Fendrick, the city’s director of administrative services, said council members and the mayor were hesitant to propose such a hefty tax hike without giving residents any additional services more bang for their buck. As such, the budget presents a few program changes and improvements to city services.
The city is proposing a trial transit loop that will go through downtown, the Canada Games Centre, the college and the Chilkoot Centre, running every 15 to 20 minutes.
This, and continuous service at the end of the day, will mean a 50-cent fare increase, from the current $2.00 a ride to $2.50.
The city is also hiring more emergency dispatch workers at the fire halls, new staff to maintain city vehicles, and upgrading the city’s compost grinder.
‘The Parks and Recreation Department will be receiving $65,000 a year to implement the recently-approved parks and recreation master plan and the trail plan,’ said Buckway.
While these new expenses were presented as extras, Buckway said property taxes still would have gone up from last year’s five per cent raise regardless.
Taxes rose two per cent per year the four years before that, Fendrick noted.
Aside from these new expenses, the city budget allocates spending on new infrastructure, and increased service.
Among the spending highlights from the 2008-2011 budget are:
$20 million toward the three phases of development and improvements in Takhini North;
$16 million to move the Municipal Services Building across Fourth Avenue to the old Canadian Tire building, which the city is purchasing;
$11 million to the Hamilton Boulevard extension to the Alaska Highway, which is now underway;
$9 million to replace Fire Hall #2 in Takhini;
$1 million to expand Grey Mountain Cemetery;
$4 million for above and below ground improvements to the Marwell area; and
$4 million to upgrade the city’s computer systems.
The city is also allocating $1.5 million to develop the Stan McCowan Arena site into residential lots. The fate of the arena has yet to be determined.
Fendrick outlined the city’s six residential development projects to highlight how many units they will yield, and when they will be ready for lot sale.
The Stan McCowan Arena site is slated to host 20 to 80 units on lots likely to be sold in 2008.
Takhini North Phase I is to yield 90 units for 2009, while Phase II is apt to provide 100 homes for 2010.
The Arkell subdivision expansion should see 150 to 250 unit lots in 2009, while the Porter Creek Whistle Bend neighbourhood will produce lots for more than 200 residential units.
The city is capitalizing on federal gasoline tax revenues, which amount to more than $45 million in the next seven years.
This budget makes room for 17 projects that meet gas tax funding eligibility criteria.
These include expanding the Porter Creek compost and garbage cart pilot project to residents throughout the city at a cost of $1.35 million, and installing water meters on every home, at a cost of $3 million.
These water meters measure water use similar to how energy bills work: the more one uses, the higher one’s bills will be.
‘This money from the gas tax is going to significantly enhance the city of Whitehorse,’ Fendrick predicted.
The gas tax, additional territorial funding and the higher tax revenues from newly-developed homes have provided the city with additional revenue with which to budget.
Consequently, Graham said, it doesn’t make sense to have a 7.5 per cent property tax increase to accommodate all the extra things in the budget, like $10,000 for two sister city visits in 2008.
He has also pointed to a new $63,000 position for a parts delivery person, wondering why local delivery companies couldn’t be hired to do the job more cheaply.
Copies of the full budget are available at city service buildings and on the City of Whitehorse website.
Residents can direct feedback to city council up until and including Jan. 14, when city council will host a public hearing at its meeting, and proceed on to second reading.