The Town of Lake Cowichan is eyeing a two per cent tax hike confirmed Mayor Bob Day. (File photo)

The Town of Lake Cowichan is eyeing a two per cent tax hike confirmed Mayor Bob Day. (File photo)

Town of Lake Cowichan taxes set to increase by less than expected

Surplus funds to help reduce hike from 3% to 2% this year

The Town of Lake Cowichan has settled on a two per cent tax increase for its portion of property owners’ annual tax bills.

“It’s all but done, it’s just the formalities now,” confirmed Lake Cowichan Mayor Bob Day on March 26.

He noted the budget is to be finalized within the coming weeks.

Residents had been looking at a three per cent increase but council opted for two per cent instead, according to Joseph Fernandez.

Fernandez, chief administrative officer for the Town of Lake Cowichan, said the budget process had moved forward during a Tuesday, March 23 meeting.

SEE RELATED: Lake Cowichan council briefs: Water treatment plant a success, taxes going up

“We were looking at a three per cent increase but council decided they wanted it lower than that,” Fernandez said.

The reduced hike doesn’t mean reduced services however.

“They decided to use some surplus revenues so that no cuts were made,” he explained.

It does come at a cost, though.

In a memo to mayor and council, the CAO noted their ultimate decision didn’t show restraint.

“Instead of eliminating the deficit in the general estimates, an additional $22,000 was added to the deficit requiring a total transfer from the general surplus of $91,533 to accommodate a lower tax increase, a not altogether prudent move,” Fernandez wrote.

Mayor Day said there were solid arguments to be made on both sides and council made their decision with trepidation.

“Staff, and even ourselves, were torn there on both sides that it’s not good to take away surplus at all because it’s money that’s set aside for those rainy day things,” Day said.

The mayor explained that when the town applies for large grants from other government sectors — provincial and federal — there is usually a cost-sharing agreement in place where the local government has to put up one-third of the cost of the project. That’s what the surplus funds are for.

“I’m not a fan [of using surplus funds to lower taxes] but the other choice was to cut projects and council was more in favour of dipping into the surplus this year,” he said, citing COVID-19 as a reason for keeping the increase lower.

Town taxes are only a portion of residents’ overall tax bills with the likes of school district, regional district, and hospital district taxes also adding to the bill.

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