Save Those Pennies

Open House generated a lot of questions.

February 4th, 2013 may have been the last day for the Canadian penny but save them until June to help offset a huge proposed tax increase in Wetaskiwin??  February 4th was also the day Mayor Bill Elliot stood in front of approximately 100 City of Wetaskiwin ratepayers in Council chambers and presented the City’s rationale for a tax increase of 9.4% for 2013 and 7.2 % for 2014. He also described why the City utility departments, including water, sewer and solid waste operations are proposing an 8.1 % in 2013.  
    The Mayor’s presentation began at 7:00 pm and concluded at 7:38 pm. He then performed a gutsy move and opened the floor for questions. And he got them. Everything from ‘costs of remodelling  the Library, high taxes for condo owners, the status of the $2.75M fundraising campaign for the Aquatic Centre, the Airport costs, City Manager’s salary and the inquires kept coming his way for almost an hour. The Mayor was agitated by some of the questions. The audience was agitated by some of the answers. But in the end, after approximately 2 hours, all questions were responded to and the crowd dispersed to the lobby for ongoing one-on-one discussions.     Council will vote on budget increases at the Council meeting on February 11, 2013. 

So what does this all mean? 
    Using a $300,000 house as an example, the cost of the proposed tax increase would be $205 per year and increased utility costs would be $94.68 for a total increase of $299.68.
    Wetaskiwin City Council ended 3 days of budget deliberations on January 10th after being presented by City Administration with a proposed a 14.2% increase for 2013. This was whittled down to 9.4% by City Council. Ratepayers are not happy with the announced tax increases as they look with envy at modest increases of 3.9% in Leduc and 3.65% in Camrose. 
    The January 14 press release from the City of Wetaskiwin Communications Co-ordinator, Dale Cory announcing a public presentation of the proposed budget was titled City of Wetaskiwin to present the proposed two-year budget to residents. The release was highlighted with Fiscal responsibility. Accountability. Sustainability.  Considering the response of the crowd at the public meeting and proposed hefty tax increase, most ratepayers consider this an oxymoron. 

Wetaskiwin caught in financial sandwich
    The year 2013 will be remembered by ratepayers as the year they were the feeling squeezed into a 9.4% financial sandwich. This is the year they find themselves caught in the middle of “paying for short falls of years gone-by and paying for increased needs in years to come.”  But, as City Manager Ted Gillespie claims, it’s necessary if Wetaskiwin is to maintain and even improve programs and services and facilities. Unfortunately, due to bad planning in the past and insignificant residential, economic and industrial growth, Wetaskiwin residents will be tightly squeezed in the financial sandwich for many years. The caution is to avoid tax increases that will compound the problem. Each dollar paid in taxes is a dollar less for consumers to spend in retail and for businesses to invest in growth and development. 
    The City's utility departments, including water, sewer and solid waste operations proposed increase is 8.1 per cent in 2013. The press release defends the increase with the explanation, “The approach taken is to phase-in rate increases so that the utilities will eventually cover all of the operating costs, annual inflation and replacement costs.”  It also defends the overall increase.  “Entering budget deliberations, Council was faced with a potential 14.2 per cent increase in 2013. Of that amount, 8 per cent was beyond Council’s control. These included increased costs of the RCMP (2 per cent), Wetaskiwin Regional Aquatic Facility (3.1 per cent), pension and financial system costs (1 per cent) and inflation (1.9 per cent).” 

Aquatic Centre costs 3.1%
    Although the press release claims 8% of tax increases are beyond Council’s control, approval of building a $22,400,000 Aquatic Centre was a decision made by Council that has added a 3.1% tax burden in 2013. This will be a never ending burden on ratepayers as operating costs laid out in the Aquatic Centre Business Plan predicts costs to increase each year from $772,860 in 2012 to $1,669,485 in 2015. This will leave a net operating shortfall (taxes) of $716,130 in 2015.
    At the time the project was approved, it was agreed the previous allocations for the Aboussafy Centre debentures would be carried forward and that additional tax revenues would be required for capital funding – these were projected at 1.35% in 2012; 1.35% in 2013 and .35% in 2014.
    And, it doesn’t end there, either
The increases do not include surges in user fees for facilities, programs and services. Also included in your tax bill will be Wetaskiwin Area & Lodge Authority tax and the education tax. The City collects these taxes but has no control over any increases. It is expected the education tax could take a significant jump in 2013. 
    The press release applauds a decision by Council.  “Council has decided not to give itself an increase (for the second straight year), and only approved a 1 per cent Cost of Living Allowance (COLA) increase for City staff.”  But as ratepayers pointed out during the meeting, that doesn’t pacify ratepayers and especially seniors or single parents struggling ‘just trying to make a go of it on a fixed income’.  
    Regardless of the final tax increase(s) approved by Council on February 11th it will be high enough that ratepayers will not be happy when they receive their tax notices. Ratepayers will not be happy in June when they take their cheque to City Hall. And ratepayers will likely show their displeasure in the October, 2013 municipal elections.