Sturgeon County approves first reading of mil rate bylaw

By Stephen Dafoe

Sturgeon County – Council narrowly passed first reading of its 2012 tax bylaw which would see a split mil rate wherein residential properties would be taxed at a rate of 6.85 per cent increase and non-residential properties at a 5.35 per cent increase. The split rate would lower the municipal tax increase from the 6.85 per cent identified in the 2012 budget to 5.93 per cent. First reading of the bylaw passed with a 4-3 vote of County Council. Mayor Don Rigney and Councillors David Kluthe and Don McGeachy voted in opposition.

Administration explained a 5.93 per cent tax increase would allow the County to preserve the pay as you go contributions to the County’s capital projects as well as making a small contribution towards funding the County’s 2 per cent rehabilitation/sustainability initiative, thus reducing reliance on debenture funding.

Council had decided last December on a 6.85 per cent increase to meet the County’s operational and capital needs. Although residential assessment is $6 million less than anticipated, linear assessment and non-residential assessment came in at a combined increase of $51 million higher than expected. The additional assessment would generate an additional $471,485 in tax revenue if Council had maintained its original 6.85 tax increase across the board.

Councillors spent considerable time debating just what to do with the tax windfall. Mayor’s Rigney and Councillors Kluthe and McGeachy advocated passing the windfall on to County residents by lowering taxes; the remaining members of Council wanted to put the monies back into reserves to restore monies taken out in previous years.

“I think it’s imperative we keep our tax rate low for residential and non-residential,” said Councillor Don McGeachy, adding most properties were above the average identified by Administration. “I think any tax break we can give across the board is prudent.”

The Councillor advocated lowering the tax rate to 5.05 per cent, a move that would have reduced taxes by approximately $23.60 per household instead of the $11.80 anticipated by the rates approved at first reading.

But Councillor Ken McGillis wanted to see some monies put back in the coffers to replace funds the County had taken out in the past. “We ran a deficit last year. We’ve gone along running deficits and taking money out of reserves,” McGillis said. “Now we have an opportunity to pay some of it back. We have no real capacity left to deal with the unexpected.”

Councillor Tom Flynn agreed with his council colleague, arguing money is needed to deal with unexpected things, including fires, floods and excessive snowfalls, the latter experienced throughout the region in 2011. “I’m really concerned with taking that approach and not putting some back,” he said.

For Councillor Joe Milligan, the idea of running continuous deficits was unacceptable. “If we keep running on a deficit, it’s going to be overwhelming and we’re going to be in a Greece position,” he said. “I think we have to go forward with our increase. We can’t progress with services with no increases.”

Councillor David Kluthe, who attended the meeting by conference call, took issue with breaking taxes down to monthly increments to make it palatable to rate payers. “Enough with that chopping it into smaller pieces to make it sound better,” he said.

It was an opinion shared by Mayor Rigney. “It’s the way to pluck the most feathers from the geese with the less hissing,” he said of the figures, adding tax increases in Sturgeon County between 1999 and 2010 had increased by more than 300 per cent. “I believe if we can have a lower industrial mill rate we can grow some wealth. We have the most expensive net taxes in the region. I’m going to support anything that’s going to bring that down.”

The motion for a 5.03 per cent increase was defeated 4-3 with only Mayor Rigney, and Councillors McGeachy and Kluthe supporting it. The subsequent motion to accept Administration’s recommendation for a split mill rate was approved 4-3 with Rigney, McGeachy and Kluthe voting in opposition.

A subsequent vote to put the $232,000 a split mill rate would generate above budgeted tax revenues into transportation reserves was narrowly passed with a 4-3 vote of councillors. Mayor Rigney and councillors Kluthe and McGeachy voted in opposition.

Second and third reading is scheduled for Apr. 24. If passed, it is anticipated tax notices will be sent out May 28. Municipal taxes would be due June 29.

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