Budget 2011 in full swing
Quesnel City Council met to discuss the 2011 budget in detail on Monday, January 31st
The purpose of the meeting was for Council to:
a) Review the Preliminary Budget Overview, including the proposed operating budget of each department.
b) Review the legislative budget, which covers Council’s day-to-day operating costs, including travel, hosting and supplies.
c) Review the supplementary budget items list. These are new spending items that are operational in nature and requested by Council, staff or Committees of Council.
d) Review the community support items. This is funding that is provided to various community organizations that provide a service for the City.
Dollar figures or percentages referred to in Budget 2011 news are subject to change and should not be considered final until the budget process is complete.
About Budget 2011
Council directed staff to prepare a budget targeting an average tax increase of no more than 5.5%, with no tax shifting from the heavy industrial class to the other classes.
With that in mind, staff prepared a preliminary budget overview, which Council reviewed in detail. The draft budget achieves the target set by Council and does not include any personnel or significant service reductions. The overview is available at www.city.quesnel.bc.ca/budget2011.asp
During the review of the legislative budget, Council trimmed $9,000 from its proposed 2011 budget, reducing funding for areas such as advertising, meals and special projects.
As for the supplemental items, Council approved three projects worth $11,500 in principle, while deferring several other items to a future meeting.
Discussion on the community support items was also deferred to a future budget session.
Budget 2011 pressures
As was the case last year, the City continues to face challenges with assessment. The City saw significant loss of its industrial assessment base. In 2010, Northstar Lumber was granted a final shutdown allowance, reducing its assessment by $2.37 million and resulting in lost municipal taxes of about $145,000.
Another industrial property, Quesnel River Pulp, successfully appealed its assessment. As a result, the City will lose about $3 million worth of industrial assessment in 2011, which equals about $180,000 in municipal taxes. That appeal is retroactive, meaning the City will return about $685,000 to West Fraser for 2009 and 2010. The City had anticipated this and has about $565,000 in a tax stabilization reserve, but an additional $120,000 from Budget 2011 must be used to cover the cost.
The assessment changes alone result in about a three per cent tax increase. A “status quo” budget would result in an additional three per cent increase for the average homeowner.
Budget 2011 quick facts
The average home assessment in Quesnel is $164,429 (up 4.4% from 2010).
If your assessment increased by more than 4.4%, you’d see a greater tax increase than the average number referred to throughout the City’s budget process. If your assessment increase was less than 4.4% you’d see an increase less than the average.
A 5.5% tax increase means the average house, whose assessment increased by the average of 4.4%, would be charged $33.52 more for municipal taxes in 2011 than 2010.
Each 1% tax increase equals approximately $125,000.
The draft budget shows the City collecting a little more than $12.573 million, up from 2010, when it collected $12.257 million. While that increase is 2.6%, the tax increase required is 5.5% due to the significant changes in industrial assessment.
Major industry provides 62.7% of the funds for the City’s general taxes, down from 67.5% in 2001.
It is anticipated the budget process will be complete in April, with bylaws and tax rates approved prior to May 15.
Next Steps:
The next budget meeting is scheduled for Monday, February 14 at 3 p.m in Quesnel Council Chambers when Council will review the five-year capital plan.
Council still has to resolve a number of issues including: capital projects; setting tax rates; and reserve allocations.
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