In unveiling its proposed $70.6-million operating budget for 2016, which raises property taxes, utility bills and other fees, the city also revealed plans to use reserve funds to run its water and sewer system.

The annual operating budget was brought forward at Monday’s council meeting. Council members approved first reading of the spending plan, which is up $1 million from the 2015 operating budget of $69 million.

The plans include a 1.7 per cent increase to property taxes, a four per cent hike to water and sewer rates, and an additional 6.8 per cent charge on waste collection.

There are also increases to a variety of fees.

The change to water and sewer bills will no doubt be noticeable to property owners.

Had the budget not included the provision to use reserves for the system’s operation, however, the increase would have come in at 7.5 per cent or a monthly rate of $78.50 instead of the proposed $75.94.

Ratepayers are currently charged $73.02 each month.

“It was a hard decision to make,” Mayor Dan Curtis told reporters Monday of taking the unusual move of dipping into reserves typically used for major repairs and the improvements to the system.

A total of $320,000 would be taken out of the reserves for operational spending.

The water and sewer system operates on a cost recovery basis with the rates typically reflecting the cost of running the service.

As Curtis told reporters, during budget discussions, council members thought it was better in the long run to offset the higher costs the system is seeing until there are more homeowners in neighbourhoods like Whistle Bend.

While the city provides the service to the new neighbourhood, with fewer homes there yet, it becomes a challenge to pay for it, Curtis explained.

As more development occurs in the neighbourhood, the increase in population will help offset the high costs of servicing the area.

Still, the mayor acknowledged that taking from reserves for now is not something he’s proud of, nor something the city can continue to do year after year.

“We know that every penny counts,” he said, noting the challenge for homeowners in budgeting for increased costs.

As he pointed out, it’s rising costs for wages and such that cause the city to raise property taxes, utility charges and other fees each year.

While taxpayers may be faced with another 1.7 per cent on their property tax bill this year, it’s lower than the 2.24 per cent increase the city had predicted for 2016 in last year’s budget.

The city’s operating budget also includes early planning for two years out. The city is projecting a 1.7 per cent tax hike in 2017 and a 2.3 per cent increase in 2018.

Curtis told reporters that though an increase of 2.24 per cent had been expected last year, October’s municipal election saw a change on council that resulted in the lower increase.

“This council really took ownership of this budget,” he said, noting the city worked hard to find efficiencies that would limit the tax boost.

Part of the reason the operating budget came forward a few weeks later than usual was the work council was putting into it since shortly after the election.

While the city looked for efficiencies in spending, Curtis told reporters, that will not mean any staff layoffs.

“Council appreciates the efforts of employees across the city,” Curtis said in his budget speech.

“We have an exceptional team of employees on the ground delivering a variety of services day in and day out.

“City departments and employees are continuing to do more with less. We know that isn’t easy, and they deliver an outstanding level of service to our community.”

He went on to point out that most of the city’s budget is spent locally, with the money making its way back into the community.

Throughout his address, Curtis emphasized how the city spends the tax dollars it receives.

“Taxes help pay for roads, fire protection, recreation facilities, parks and trails, transit, planning, engineering and other operations that keep the city running.

“Taxes in Whitehorse remain lower than most other comparable municipalities, and our modest tax increase will keep it that way.

“We are making the best possible use of tax dollars and we are working hard to keep taxes low. At the same time, we are working to maintain top quality services for citizens.”

Overall, Curtis said, he’s pleased with the proposed 2016 operating budget.

With first reading of the spending plan now passed, residents are invited to share their thoughts on it, with a public input session scheduled for council’s March 21 meeting.

A staff report on the input would then come forward a week later, with second and third readings expected March 29.

The city’s $16 million capital budget for 2016 was adopted in January.

Coun. Rob Fendrick attended Monday’s council meeting by phone.

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