Hay River residents can expect their property taxes to increase three per cent and their utility charges to go up another four per cent next year.
Town council is epected to vote on the draft 2022 budget Dec. 20. The town’s finance director filled them in at a committee meeting Dec. 6. Sam Mugford said the impact to homeowners will be more clear when the mill rates are set in the new year.
Coun. Keith Dohey said he and his colleagues are walking a fine line between balancing the town’s books and delivering property and business owners a tax increase they can absorb.
“I think this council is very much alive to the reality that any increases will always impact our residents, which is why we have always tried to make those increases modest,” Dohey said. “It’s a fine line to walk considering the inflationary increases that are hitting everyone.
“The reality is those price increases hit the town as well and we need to be able to keep up, it really becomes a matter of trying to find an appropriate balance and I think this budget is close to the best we can do in that regard.”
According to Mugford’s presentation, capital spending in 2022 is planned to be $19.07 million, which is up from $18.5 million spent in 2021. In 2021, capital expenses accounted for $14.7 million.
“We’re showing an overall increase of around half a million dollars,” Mugford said. “However, I’d like to point out that our 2022 budget doesn’t do approximately $4 million of carried forward which we identified as part of our quarter three 2021 update.”
A large majority of capital expenses are proposed to be directed towards public works projects as that department represents about $12.9 million. This includes the extension of and upgrades to Riverview Drive and erosion mitigation work on Alaska Road, and work on Beaver Crescent, Capital Drive and Industrial Drive.
Among the biggest expenses in the new year include the ongoing lift station project which started in 2021 and is carrying on into 2022. Funds from that project come largely from the Investing in Canada Infrastructure Program.
Other departments are also seeing increases with recreation to see $1,967,000, up from $904,000 spent last year; $400,000 to be spent on protective services, up from $130,000 last year. Land development is expected to see $2,950,000 spent, up from $1,999,450 in 2021.
Much of these line items were discussed during the 10-year capital plan presented by Mugford and passed by council in October.
Mugford noted that about 70 per cent of the town’s revenue comes from external resources – namely the federal and territorial government while contributions from the municipality come from reserves and property taxes.
Councillors intend to pull $5.6 million from reserves to help pay for that capital work. They’ll be dumping $1.7 million from the town’s operating surplus back in that account, so it’ll have a balance of about $3.5 million when all is said and done.
“While it’s not ideal to be drawing that from reserves, 70 per cent of our capital budget is funded through outside sources where the town has to pay the minority share,” Coun. Dohey said.
“Essentially we are buying dollars for 30 cents a piece. When we have the opportunity to take advantage of outside funding we feel it’s prudent to do so. Drawing from reserves at a time like this, when the economy is tight allows us to take on these projects without substantial tax increases.”