The City of Port Moody has found a way to chop nearly three percent from what would have been the biggest tax increase in four decades.
Property taxes are now slated to rise 9.29 percent increase, an average of $246 more per household, following a resolution passed by council on Tuesday.
“I’m very pleased to see that we have been able to reduce it,” said Mayor Meghan Lahti. “This has been a very difficult year, and I’m hoping as we move forward we will be able to indicate and find other sources of revenue.”
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Initial projections forecasted a budget increase of 11.3 percent – which later increased to 12.17 percent due to regional labour settlements – just to maintain the city’s current level of services.
Many cities across Metro Vancouver are facing similar large increases. The highest: Surrey, with an increase of 12.5 percent; Langley City is currently at 11.6 percent; Vancouver is at 10.7 percent. Port Moody’s new rate increase is fourth highest in the region.
Its Tri-Cities neighbours, Coquitlam and Port Coquitlam, have the lowest increases in the region at 5.5 percent and 3.4 percent, respectively.
Inflationary and labour pressures, aftershocks from COVID-austerity budgets and decreased program revenues were all given as reasons for the spiking tax rate.
Paul Rockwood, general manager of finance and technology, said that while the city has seen some revenue increases, mostly related to new development, those funds are being transferred to the city’s reserves.
He added that supplementing tax increases by drawing from city reserves – which some municipalities have done – is not sound financial strategy.
“If you do that, you just pass that burden on to future budgets for future generations, it’s not sustainable,” Rockwood said.
Staffing costs account for 5.3 percent of the tax increase. New positions in communications and engagement services, cultural services, parks, building bylaws and licensing, fire rescue and police services are being added to address increasing demand.
Rockwood said the city has not increased its labour force in several years. The new positions will be phased in, meaning half their cost will need to be addressed in the 2024 budget.
Increases to the police department’s budget added another two percent, while inflationary costs added another one percent.
Additional one percent increases were allocated toward the capital asset levy, as well as a reserve stabilization, due to the city changing land uses around its industrial zones.
Lastly the city events cut during the pandemic added 0.61 percent to the city’s budget.
The biggest windfall related to budget savings came in the form of BC Hydro expanding the industrial lands around the Burrard Thermal Plant.
Shared publicly for the first time on April 4, the expansion translates to an additional $1.1 million in city revenues. An ongoing appeal, however, means the city is deducting that total by $360,000 to reduce risk.
Other reductions include additional revenues from the building bylaw and licensing department, and changing leases to the city’s fire trucks.
Public engagement on the proposal tax rate gauged residents on how they felt about the quality of services in the city, and whether certain service budgets should be cut, raised or maintained.
A total of 377 people responded to the survey, the most in Port Moody history, according to staff.
The majority of respondents submitted that all services should be maintained or enhanced – with the exception of cultural services, where 62 percent were in favour of reductions.
During budget deliberations, council voted to defer the hiring of a public art coordinator.
Several councillors suggested that the need for this position may be unnecessary, due to the new Arts and Businesses Coalition Task Force, announced in March.
“I really think that we should give that task force a chance to do its work,” said Coun. Kyla Knowles. “But in the meantime, the name of the game right now is restraint.”
Some on council stressed the need to diversify the city’s revenue sources to avoid reliance on property tax increases in future budgets.
Coun. Haven Lurbiecki cited survey comments related to traffic infrastructure and park space, and increasing demands on city services.
She said council needs to follow the city’s economic development master plan, and developers need to be paying their fair share.
“The fact is, growing costs money,” Lurbiecki said. “Equity is really important. And unfortunately, regressive taxes like property taxes don’t allow us to consider how a blanket tax impacts individual households differently.”
Council Diana Dilworth described this budget as “a perfect storm” resulting from three years of the pandemic.
She said council needs to “think outside the box” when it comes to diversifying its revenue streams.
“Am I happy with 9.29 percent? No … It’s horrible,” Dilworth said. “I am prepared to certainly be assertive in looking at additional revenue streams. But that is certainly not limited to creating jobs in one particular area of the city. It’s looking at subsidies, it’s looking at user fees, there’s a number of other ways.”
The provincial deadline for municipal budget submissions is May 15.