By Andrew de Souza

City wants a 10 per cent tax hike

Dec 21, 2010 | 4:23 PM

Prince Albert residents can expect a substantial increase to their taxes in 2011.

It’s because the city needs to increase revenues substantially just to keep the status quo.
In budget documents released on Tuesday, the city’s financial department is requesting a minimum tax increase of 6.4 per cent. City financial manager, Joe Day, said that’s the bare minimum needed to keep things going.

“In the long term, that isn’t going to help the city out at all,” said Day. “Basically it says let’s not put anything towards our savings account, let’s only budget for things in our capital budget that are completely falling apart.”

Day said the recommendation is to increase taxes by 10 per cent as a middle-of-the-road option that would allow the city to catch up on several projects but would also soberly turn down many requests from the city’s departments.

In 2010, the city had to make several cuts to capital projects when the province announced it would not provide municipalities with the money generated from the Provincial Sales Tax.

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This year, the province reinstated that funding, and the city will recieve approximately $1.4 million, but the city said that would only covers what should have been done last year.

Rising costs, growth cited as factors

The city is also dealing with rising costs. One of the largest increases in the city’s 2011 budget is wages, salaries and benefits which increased by 9.53 per cent to $33 million. As well, several employment contracts are currently being negotiated and will be binding to the city once they are agreed on.

“Our problem is that the cost of doing business is going up and up and up,” said city manager, Robert Cotterill.

“Some of the problems we had with the downturn in the economy—pension, wage increases—are now starting to catch up with us. Because were a labour-intensive organization, it’s costing us a lot of money.”

Day added that in order to get everything done that the departments have asked for, the city would need to increase taxes by more than 16 per cent.

Cotterill said it’s an unfortunate reality that more money is needed just to both keep the city running and deal with growth.

“Our city’s growing,” said Cotterill. “You can’t continue to grow a city and not continue to need further funding to make it happen.”

Cotterill said taxes are the only way to get those funds because unlike other cites, there are no other sources of revenue.

Changes up to council

The recommendations from the city’s administration are not binding. City council deliberates and gets the final say.

“We’re cautious to be as prudent as we can be, knowing that we have to have increases,” said Mayor Jim Scarrow. “I suggest that it won’t be any of the figures suggested by administration, but one that will that council works with and what they figure works to keep Prince Albert moving forward.”

They start budget committee deliberations in January and members of the public have an opportunity to speak to council about budget items at the Jan. 10 council meeting.

Council is scheduled to present the final budget on the January 24 council meeting, but can take as long as needed to come to a decision.

For more detailed looks at the city’s proposed budget, check back with paNOW.com.

Click here to see the city's full budget document.

Tax Options Presented by the city

Option A
-Taxes go up: 16.09 per cent
-Average increase per home: $201
-Additional revenue for the city: $3,552,450

Option B (city’s recommendation to council)
-Taxes go up: 9.92 per cent
-Average increase per home: $124
-Additional revenue for city: $2,189,990

Option C
-Taxes go up: 6.47 per cent
-Average increase per home: $81
-Additional revenue for city: $1,434,840

adesouza@panow.com