2009 City Budget Released - "Getting out of regional recreation" Saves Money
The full depth of the regional recreation break up continues to reveal itself in many ways, most recently in the city’s 2009 draft budget and five year financial plan. At first glance, the top line entry of General and Utility taxes jumped out as having increased by 26.8% or $740,811 from $2,803,993 in 2008 to $3,554,804 in 2009. This seems to be a large increase especially in light of the five year projection of that same line item to rise 4.48%, 3.04% and 1.99% in the next few years.
City financial manager Deb Timm explained that “The reason for that is because of the regional recreation dissolution. So instead of the Regional District taxing for recreation, the city is now collecting that tax revenue, so the regional district requisition will go down but the city’s went up, that’s why it’s a 27% difference.”
This tax shift should see the City of Rossland realizing significant savings with more money available to go into local recreational programming and facilities.
“A lot of the recreation stuff is up and we’re putting money away for capital spends like the Miners’ Hall,” explained Timm. “We actually realized some savings–if you want to call it a savings–between what we were sending down the hill for recreation services and what we were getting back up the hill–almost $300,000 except that we now pay the library requisition also. We actually realized around $100,000 in gain by getting out of the recreation service. That’s money that we can now use for our local recreation facilities.”
In another sign of the times, the 2009 budget shows an expected decrease of 58% in the city’s revenue from Licenses & Permits. Building and development has stalled in Rossland and accompanying building permit revenues are expected to be significantly lower in 2009. There has been an overall reduction in the planning department’s revenue of approximately $106,300 (60%).
“We actually budgeted in 2008 for $150,000 worth of building permits. We realized only about $111,000 so we reduced that to only about $59,000 in 2009. It’s all part of everything slowing down and also because this council isn’t as big into development either,” said Timm.
In 2009, the city realized just over $29 million in new construction assessment for additional tax revenue of approximately $180,000. That number was down from 2008 which saw the new construction assessment of almost $37.5 million and $200,000 in additional net revenue.
The city is expecting a major increase in grants/assistance with a number of grants and matching grant money being put aside for major infrastructure projects such as the Murphy Creek intake and the Columbia Avenue infrastructure rebuild, set to take place in 2010.
Last year there was a 2% raise in taxes but once you added on the water and sewer rates, it was more than 2% so in effect the water and sewer rates went up and the parcel taxes went up but the property taxes actually went down slightly.
“Part of the government’s initiative to stimulate the economy was a small communities grant. They gave us about half of next year’s grant this year so that is why it seems like more this year. It is just a shift in grant funding this year and we did get some more grants for infrastructure projects,” said Timm.
“Small communities under 5,000 usually get a small communities grant. They changed the name of it to ‘Strategic Community Initiative’ and they were giving the majority of two years’ worth of grant funding in one year. So basically that grant was always used to offset property taxes, so what I’ve done is I’ve kept the same amount in 2009 and I’ve deferred the rest of it into 2010 so that it’s levelled out between the two years. But they are giving us all of the money in 2009, so it looks like more this year.”
[See the attached file for the full 2009 draft budget and five year financial plan.]
The draft budget will now come back before council on Monday, May 4th for third and final reading and adoption. The May 4th council meeting at 7:00 PM will open with a public information session on the draft budget for anyone who wishes to have their say. If adopted on Monday night, council will bring a close to a long process for city staff that bridged two significantly different councils.
“I actually started it last fall and we didn’t have the majority of council coming back so I just tabled it because you don’t want the previous council to set the budget for the next council,” said Timm, describing the budget process. “It has taken quite a lot longer with this council because they are new. We’ve been through several budget discussions on this one and they’ve made a commitment to the residents that they will start with some public consultations in the fall on next year’s budget.”