Residents of North Cowichan could face a property tax hike as high as 5.92 per cent in 2020.
Finance director Mark Frame said in a staff report that was tabled on June 19 that the largest spending increase next year in the budget is related to the soon-to-be-built new facility for the North Cowichan/Duncan RCMP detachment.
The first year of debt in 2020 to pay for the approximately $40-million facility will cost the municipality an additional $618,000 next year, which is a 2.1 per cent increase in taxes.
Frame said that a further 1.1 per cent of the proposed tax increase is due to a projected 2.5 per cent increase in inflation, which will add approximately $331,000 in spending to next year’s budget.
A contractual two per cent wage increase for municipal staff accounts for another approximately $300,000 increase in spending, which is an additional one per cent of the projected tax increase.
Another 0.6 per cent tax increase is expected due to plans to implement aspects of the municipality’s safer-community program, and for fire-call pay, totalling a further $190,000 in spending.
Frame said other, smaller cost drivers that aren’t detailed in the report account for the remaining 1.12 per cent increase in the projected budget.
But he said the 5.92 per cent increase was what the finance department projected last year for 2020, and as the numbers are crunched and financial picture becomes clearer as next year approaches, the projected tax increase will likely be closer to 4.8 per cent.
North Cowichan’s CAO Ted Swabey said at the meeting that 2020 is a “bad budget” year because the municipality has to deal with the loss of revenue from the municipal forest reserve in 2019 due to council’s decision to suspend logging there for the year, on top of the start of debt payments for the new RCMP building when building the budget for next year.
“It will be a challenging year for the municipality,” he said.
Coun. Tek Manhas said he would like to see a scenario in which the tax increase next year would not be more than 1.5 per cent, plus the costs of the new RCMP building.
Mayor Al Siebring asked Swabey if staff has any idea about how much cost savings there would be in the new police building’s budget if North Cowichan partners on design and other aspects of the construction with another jurisdiction that is currently constructing a similar-sized RCMP detachment, as is being investigated.
“We’re estimating the cost savings would be less than $1 million, but I’m guessing and we don’t really know right now,” Swabey said.
Coun. Kate Marsh said it’s still early in the process.
“Until we see what plays out, there’s no need to deep dive into this right now,” she said.
“I suggest we approve the recommendation (that council approve in principle the budget schedule) and begin full discussions when budget season starts.”
Frame said budget meetings will begin in late October or early November, with the goal of having a draft financial plan developed by Dec. 31, 2019, with final adoption of the budget by council expected in January.
“Municipal divisions have been asked to complete their capital plan business cases for 2020 budget requests by the end of June,” he said.
“This allows staff to work on the capital expenditures plan over the summer. Staff will bring a report to the council meeting on Aug. 21 with an outline for public engagement (in the budget-building process).”
North Cowichan set a 2.95 per cent tax increase in 2019.
Projections for upcoming years could see a 4.97 per cent tax increase in 2021, a 2.63 per cent increase in 2022 and a 2.58 per cent increase in 2023.
Tax increases in the municipality have been below three per cent for the past six years.