The city is proposing to raise property taxes 5.64 per cent in 2018, a hike which, if passed, would be the largest since 2010.
City council will decide by Dec. 11 whether to accept city administration’s recommendation, or re-jig the proposed $77.5-million budget to account for less revenue.
The 2018 budget draft, released Monday, is slightly smaller than the $80.63-million budget approved by council for 2017.
Sharolynn Woodward, director of corporate services at the city, said Monday that it’s only a matter of time before Yellowknife residents face “a very large tax increase.”
After two years of no tax increases, property taxes went up 1.22 per cent in 2017. There was no tax increase in 2013 either. Indeed, the last major hike was in 2010, when the property tax rate went up 5.7 per cent.
“The decision to not increase taxes means that sometimes, maintenance projects are the first to go,” said Woodward.
“If we’re not looking after one of our major facilities, and small issues are allowed to grow, we will be facing major problems, or even the inability to deliver a certain service.”
At Monday’s meeting of the Municipal Services Committee, Sheila Bassi-Kellett, the city’s senior administrative officer, said that for the last few years, the city has experienced “massive under-funding” by the government of Northwest Territories, to the tune of about $11 million each year since 2014.
Considering the size of the proposed 2018 budget, she said, “that’s a huge amount of money.”
About $26.57 million is earmarked for capital spending, according to Woodward, although there is some confusion about that number. The actual budget draft states the figure is $25.13 million. Yellowknifer was told the figure supplied by Woodward is correct.
The budget states $21.94 million is slated for operations and maintenance, and $26.87 million for city staff wages and benefits.
Expectation for social issues
Surveys this year showed a rising expectation among residents that the city to take on social issues.
In 2017, Yellowknife supported a day shelter, as well as the safe ride outreach van, which offers those in need free rides to shelters.
The budget draft includes a list of social projects to fund, including street outreach services ($360,000), a homelessness employment program ($100,000), an anti-poverty strategy ($75,000), and the day shelter ($50,000).
Woodward said if the city can secure funding for these programs from other levels of government, then the proposed property tax increase could be reduced.
Bassi-Kellett expressed hope that negotiations with the federal and territorial governments will yield a “significant contribution” in 2018 for street outreach.
The city wants to hire of a “revenue specialist,” for $115,000, who would be tasked with seeking out other sources of funding for the city.
A food security strategy, a university feasibility study, and developing the School Draw parking lot, are also on the city’s wish list.
In 2018, a third of Yellowknife’s garbage management costs will be paid through user fees, which show up as a levy on the monthly water bill. The remaining costs will be paid through tipping fees at the landfill.
City administration is recommending an annual 2.5-per-cent increase on solid waste user charges through 2020.
Even with increases in user fees, said Woodward, the solid waste management fund will be in a deficit position. This is because of a 2014 requirement to up the landfill closure liability by $16 million.
Administration is also proposing to raise water and sewer user charges by 4.6 per cent each year through 2020.
Unlike the territorial and federal governments, the municipality is required to balance its budget.
The city expects to bring in $78.5 million in 2018, primarily through taxes ($28.7 million), user charges ($24.2 million) and government grants ($22.7 million).
Yellowknife has grown substantially over the last 15 years, with developments at Niven Lake, Grace Lake, the Engle Business District and others.
Likewise, the volume of infrastructure has increased “exponentially” in recent years, said Woodward, with hundreds of metres of new trails, five new sewage lift stations, a water treatment plant, playgrounds, docks, parks, and more.
And yet, only two new public works staff have been hired to deal with upkeep.
“Getting all this expanded infrastructure in place was a major feat but now it must be maintained,” said Woodward.
“Staff levels have not kept up with the expansion.”
In coming up with the 2018 budget draft, said Woodward, city staff made some “really difficult decisions.”
These included putting off hiring four new firefighters until 2019.
“For years, the mantra has been ‘Do more with less,’” she said. “But how much more can realistically be expected?”
The public is invited to offer feedback on the 2018 budget draft over the coming weeks, and council will adopt a final version of the budget on Dec. 11.