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September 15, 2019 September 15, 2019

M.D. council looking at budget recommendations

Posted on June 6, 2019 by Vauxhall Advance

By Cole Parkinson
Vauxhall Advance
cparkinson@tabertimes.com

After finance committee recommendations were forwarded to the Municipal District of Taber council, they have passed their 2019 operating and capital budgets.

Council got their chance to review several recommendations at their regular meeting on May 28, many of which pertained to the 2019 budgets.

The first recommendation was to pass both the operating and capital budgets for 2019.

The 2019 proposed operating budget projects a $535,422 deficit compared to a $520,552 deficit in the 2018 budget.The new budget also includes a non-cash expense of $4,412,479 for amortization.

A change to linear in oil and gas property, total live assessment values and additional uncollectible oil and gas property taxes means an increase of $556,703 in municipal property tax revenues from 2018. 

The final budget includes an allowance for uncollectible taxes of $600,000 on non-residential properties in the municipality. 

The M.D. had reserved $887,000 in collectable property tax attributable to oil and gas in previous years.

Currently, 2018 non-residential property taxes total over $2 million outstanding. 

Overall assets have decreased to $2,101,004,550 from $2,101,921,080 in 2019, a total of $916,530. 

Meanwhile, the capital budget nets for each departments are set for administration ($70,000), planing and development ($60,000), fire protection ($13,000), transportation services ($1,857,085), water department ($329,430), agricultural service board ($91,000), lot and land sales ($282,500) and recreation and parks ($40,000).

Net capital transactions total $2,178,015, previous year deferred revenue is $3,956,458, amortization is $4,412,479 and change in cash is $896,009. 

Council voted unanimously to adopt both budgets.

Another portion of the recommendations was around the Education Property Tax Requisition which carried a recommendation to have an increase of one per cent to the 2019 estimated property tax requisition using the 2019 equalized assessment data and the 2018 uniform education tax rates plus one per cent.

Residential and farm land had a 2018 education requisition of $1,968,765.29 at a rate of 2.56 while non-residential was $3,287,413.77 at 3.76. With a one per cent increase in 2019, estimated education requisitions for residential/farm land is $2,074,253.36 (2.59) and $3,352,080.19 for non-residential (3.8). 

Council voted unanimously to approve the recommended option.

For 2019 property tax rates, it was recommended for the non-residential mill rate to increase by 4.25 per cent, residential mill rates to increase by 3.75 per cent and farmland mill rates to increase by 3.75 per cent.

With these increases, a concern was brought forward around how it could potentially affect new businesses coming to the region.

“We are always trying to attract new businesses to the M.D., we have now lost our competitive edge. We have essentially given businesses no incentive to come to the M.D. of Taber,” said Coun. Leavitt Howg. “I don’t know if we are willing to give them tax breaks if they are willing to come but I know we are talking about this split mill rate for small businesses and I think that is a good start.”

Requisitions for Alberta School Foundation Fund (ASFF) include residential/farmland ($1,954,786.10) and non-residential ($3,349,272.66). Holy Spirit Roman Catholic separate Regional Division (opted out) is residential/farmland ($119,715.41) and non-residential ($11,152.20). Total school requisitions are $5,434,926.37.

Assessed value of all property is listed for residential ($638,906,070), non-residential ($958,729,040), farmland ($179,349,400) and machinery and equipment ($324,020,040) for a total of $2,101,004,550. 

Rates of taxation on the assessed value of all property is listed for residential (3.7477), farmland (7.7533), non-residential (9.2135) and machinery and equipment (9.2135).
For ASFF, residential (2.5403), farmland (2.5403) and non-residential (3.9418).

Holy Spirit is residential (2.5403), farmland (2.5403) and non-residential (3.9418). Taber and District Housing tax rate is set at 0.1054 and the Designated Industrial Property rate is 0.0787, which brings a grand total tax levy of $21,344,669.75. 

With the M.D. and the entire province feeling the effects of the decline in oil and gas, it was also discussed around helping them out in taxes.

“I know we have looked at other neighbouring municipalities when it comes to switching the burden on to others, and farmland being one,” continued Howg. “I think the reality is that oil is struggling right now and there is not much that can be done in the near future. At this rate, I don’t think it is fair for the oil companies, small business and residential properties to be paying essentially 90 per cent of our tax. When we look at our transportation budget, it is $9.5 million but if we take out grading and gravelling, it is $2.8 million. The majority that use our roads are from farmland, farmers and agricultural users.”

Howg asked council if it would be a good option to see a higher tax rate for farmland over the next few years in order to even things out.

“I know we can’t even out our services that way but right now, our oil companies are struggling and we have a very healthy ag sector. I feel we will have to start moving the tax burden sooner than later.”

“There is a canola ban on so there is a lot of unknowns. They are talking of adding it on to peas and pork, so to say the farming sector is striving, I’m not sure that is accurate. There is a lot of unknowns there also,” responded Coun. Brian Brewin.

Coun. Howg also pointed out he wasn’t wanting to shift a big change right away but he wanted to see a gradual increase over the coming years.

“With that, people are still going to be able to pay $2 million for a quarter of land and not think twice about it. I feel that you can still book canola in for $10,$11 for June 2020, you can still contract it out. I’m not saying to increase the farmland rates to what the residential rates are, I just think we need to do due diligence here and eventually increase,” he said.

A motion was made to accept the rates and was carried 6-1 with Coun. Howg opposing. Council also unanimously approved a $25 minimum property tax be implemented in 2020.

Split mill rates were also discussed as the finance committee recommended for the municipality to undertake a bylaw and procedures to allow non-residential class 2 – non-residential into assessment sub-classes.

“I’m not ready to make that motion, not knowing how it is going to affect our taxes and how it will all work. Without more discussion, I’m not really in favour of having this,” said Coun. John Turcato. “I agree that some of these businesses are paying too much tax but at the same time, we are looking at a shrinking budget. Without knowing what this is going to cost and where are going to make that shortfall up, that is my concern.”

“This is where small businesses are hit by market value. Non-residential and residential are largely in fluctuation with market value. Farmland has nothing to do with market value, nothing. Over the years, we keep getting more from them because market value goes up, the mill rates somewhat stays the same. Ten years ago, farmland was $1,200 an acre and now it is $3,800 and they are not paying much difference for taxes compared to residents. I think with the split rate, you will be helping those businesses out,” added Howg.

A motion was made to follow the recommendation and was carried 5-2 with Turcato and Deputy Reeve Tamara Miyanaga opposing the motion.

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