Residents and businesses looking at 1% tax increase, after 4-3 split vote

by Colin Smith

Morinville property tax rates are set to increase by 1% this year as called for in the 2021 Budget, following a 4-3 split-vote decision by Town Council.

The move came at the regular Council meeting Tuesday after Administration presented it with a variety of scenarios that would have pushed up or lowered residential taxes compared with the budget figure and increased the tax split between residential and non-residential properties.

Council reopened the 2021 budget due to a $260,000 shortfall resulting from lower than anticipated growth and reduced property assessments by more than $9 million.

The draft 2021 Property Tax Bylaw brought forward at the April 27 Council Meeting called for a 3.6% increase rather than the originally budgeted 1% to make up for the shortfall.

That had not taken into account additional revenue derived from the recently completed Sturgeon County recreation cost-share agreement. An unbudgeted $462,771 from this source and consideration of $312,273 in Covid-related reductions to wage and salary reductions changed the picture.

New proposed budget adjustments reverted to a 1% property tax increase. Property taxes will bring in $10,288,346 toward the budgeted revenue target of $15,622,219, while expenses have been reduced to $17,234,894.

The result is a deficit of $1,611,791 in the tax-supported budget, down from a budgeted $2,115,574 deficit. The tax-supported deficit will be covered by funds from the tax stabilization fund that draws on Morinville’s utilities reserve.

The utility-supported budget, based on utility fees, sees a surplus of $2,340,894 in 2021. The consolidated budget, combining the tax-supported and utility-supported, is for $22,984,948 in revenue and $22,255,845 in expenses, giving a surplus of $729,103.

With the 1% increase, the owner of an average residential home can expect a tax increase $28.87 in 2021, including municipal tax of $16.90, education tax of $10.40 and Homeland Housing requisition of $1.56.

The average commercial property tax increase will be $310.19, while the industrial increase will be $439.68.

At the Tuesday meeting council was presented with two alternate options, requested by Councillor Scott Richardson, based on increasing the residential/non-residential taxation split but keeping commercial tac bills the same.

With an increase from the current 1:1.1 split to 1:1.2, average residential taxes would drop by $116.63, while average commercial would rise by $497.85 and average industrial by $439.68 (as it would with the current split and 1% tax increase). There would be a $743,910 taxation shortfall.

A 1:1.5 split would result in a $388,127 taxation shortfall, with a $14.96 residential tax decrease and non-residential increase similar to those under the 1:1.2 split.

After Council members asked questions about the tax scenarios, Councillor Lawrence Giffin moved the adoption of the first option, a 1% property tax option with residential/non-residential split kept at 1:1.1.

Councillor Stephen Dafoe announced he would not be supporting the motion.

“It’s been a tough year for our residents,” he said. “There’s a happy medium that can give some easement to our residents and make a shift on that split mill rate.” 

Councillor Rebecca Balanko also spoke of hard-hit residents.

“I think it’s putting an amount more than what our residents are able to give at this time on a plate that is already so full,” she said.

Giffin and Mayor Barry Turner argued strenuously in favour of the motion on the basis that the tax-supported deficit must be minimized and the utility reserve drawn on as little as possible.

“We cannot use funds collected from utility bills to offset these costs,” said Turner. “This is not a reasonable use of dollars.”

Giffin pointed to deteriorating sewer and water lines.

“We know that these are expenses that are coming up, and if we don’t plan for them, they are going to hit us hard,” he said. “We know that our utilities are ageing, and we know that we cannot continue to rob our utility reserve to pay for our deficit.”

When the vote was called, the motion passed by a margin of four to three. Turner, Deputy Mayor Nicole Boutestein, Giffin and Councillor Sarah were in favour. Balanko, Dafoe and Richardson were opposed.

Following the vote, Balanko made a motion directing the Administration to bring forward a report showing the budgetary savings if all non-unionized Town of Morinville employees were to take a 1%-5% salary rollback. The motion passed, with only Turner voting against.

The 2021 Property Tax Bylaw was given first reading by Council at its April 27 meeting. It must be now be given second and third readings at the next regular meeting of Council on May 25. 

 

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