City council unanimously approved the first three readings of Merritt’s five-year financial plan bylaw, establishing the city’s financial plan for 2014 to 2018, at its regular council meeting Tuesday.
Council also unanimously approved the first three readings of the bylaw to set the 2014 tax rates.
The bylaws will come back to council for adoption on May 13.
As expected, there will be a two per cent increase across all seven property classes. The average house in Merritt is worth $216,395 and will cost $2,083.54 in general taxes this year before the Home Owner Grant.
The 2014 tax rate increase will generate another $130,000 to city revenues, financial services manager Ken Ostraat told council.
Total tax revenues collected by the city for 2014 will be $8.2 million, about $6.8 million of which will come from general property taxes, he said.
Merritt’s property classes will bring in about $6.6 million of that.
The due date for property tax payments this year will be July 2 at 4:30 p.m.
The 2014 budget is about $20 million, which is comprised of a combined $13.5 million operating budget for all city departments and a capital budget of $6.5 million, Ostraat told council.
This year’s municipal budget is a balanced one, Ostraat told the Herald. He said each city department was required to cut $200,000 from its budget and $500,000 was taken out of reserve funds.
“We take some money out of our reserves basically to cover off some of the costs of our capital program that we have for this year and future years,” Ostraat said.
The city will collect $116,500 for transit purposes, which is about the same as it did in 2013.
One project council identified as a priority for the 2014 budget is the Asphalt Rehabilitation Program, which will cost about $1.2 million.
The program is being combined with water and sewerline replacements to total just over $3 million from capital works to help fix established infrastructure, Ostraat told council.
The projects are being combined in order to take advantage of the economies of scale of having a larger project and reducing duplicate work that would come with repaving a road prior to fixing a water or sewerline.
“We’re going to do a full restoration as far as the roads are concerned, do whatever waterline and sewerline replacements have to be done on that particular section of road and then that basically rehabilitates all the infrastructure on that particular section,” Ostraat said.
Other capital projects in this year’s budget outlined by Ostraat at the council meeting were the fire department’s capital project, which involves borrowing $1 million for a new fire engine and development of a new truck bay, and expansion of the public works building.
This capital project is in the midst of an alternative approval process, and to date hasn’t received a single signature in opposition to the borrowing of the needed funds, Ostraat said. The deadline to sign that petition is April 28.
Ostraat said the estimated cost of the new fire engine is pegged at $571,000, which could change depending on fluctuations in the Canadian dollar exchange rate with the U.S. greenback.
The city has also set aside $50,000 to upgrade the lighting, windows, painting and metal facia of the firehall, Ostraat said.
The public works building will see construction of a replacement for a utility building, which was approved for $300,000 back in 2013.
“This helps to improve our public works building. It expands some of the truck bays that allows our mechanic to work on some of the larger vehicles that we have, so that everything is under a cover,” Ostraat told council.
That project will also see improvements to offices in that area as well as a new public entrance area, allowing the public to access the building without cutting through the public works yard, he said.
Ostraat talked about the capital project to build a lacrosse box and washroom upgrades at Central Park. The project is set to begin this year and will cost $728,000. Soccer pitches are also expected to placed at the park in the future, he said.
Revenues from major industry taxes are down this year compared to last by about $30,000 due the loss of the Ardew wood chip plant, Ostraat said.
For 2014, there is also a reduction of $111,000 in operating grants from the provincial government compared to last year. Ostraat said the reason for that is the fact the city is in the final year of its three-year agreement on operating grants with the province, which was front-loaded, making 2014 the lowest in funding.
He told council the provincial grants are expected to increase in 2015.
For 2014, the city faces a combined total of $451,000 in uncontrollable cost increases and revenue decreases, Ostraat said, noting that number would have required a seven per cent property tax increase to make up.
“Staff has been working hard to try and reduce costs in their budgets as much as possible. Our capital program is a little bit less than what we were hoping it could be, and we’re using some monies out of our reserves to cover off those capital costs that we need to go forward with,” Ostraat said.
One cost increase facing the city, local businesses and its residents is a nine per cent increase in electricity rates implemented by BC Hydro on April 1, Ostraat told council.
He said that increase will amount to an extra cost of $30,000 in 2014.
However, there is no change to the utility rate charges for 2014 other than moving from a penalty system to a discount system.
Ostraat mentioned other cost increases for the city in 2014, such as an additional $80,000 in labour costs.
He also said an additional $200,000 in policing costs is being added to last year’s for a total of about $2.5 million in RCMP services this year.
“That’s our single most significant cost in operating this municipality,” Ostraat told council.
“In comparison, our fire department costs us less than $1 million a year,” he said.
