Lake Country Budget Meetings

On Tuesday December 14^th at the Special Council meeting, Council began their budget deliberations with a presentation from the CAO outlining the alignment to the Council Strategic Priorities and the Corporate Business Plan to the District finances and account allocations.

Staff presented some policy recommendations and will provide a draft budget and 5-year financial plan to Council at the beginning of 2011 for a second budget meeting to be held on January 25^th.

In a nutshell, Staff requested Council if they agreed on three main objectives: maintaining the current level of service provided to the community and residents; replenish the current reserves, which have been depleted in the last few years; and address the issue of aging infrastructure that the District, like all other municipalities in Canada, is facing. Council agreed that these three objectives are a financial priority and gave Staff the green light to prepare a budget based on them.

In order to maintain the current level of service provided to its residents, Council needs to deal with a number of increases from other agencies, contractual obligations, and inflation, which in itself is 2.4% alone. For instance, RCMP costs will increase about $135,000. The total increases can be covered with a 4% increase in taxes. Staff will work on options for Council to consider. The effect of a 1% increase for each 100,000 of property value is $2.75 (two dollars and seventy five cents). The average property is assessed at $502,000, so a 1% increase would be a total of $13.80. “To put it in perspective, that would be the cost of a Chai Latte and a packet of cigarettes” said Alberto De Feo, District Administrator, to Council, “a tax increase of 4% would result in the average taxpayer paying around $55, which is the equivalent of a nice dinner. This is very good value for what we get back from the municipality and it’s an annual cost.” In the last five years, Council approved tax increases ranging from as low as 3.2% to as high as 4.9% or an average of 4%.

To replenish the reserves, Staff have recommended that the portion of property taxes that goes into reserve accounts be increased from 4.5% to 5%. This is not a tax increase but a transfer of money from what is collected to those reserves.

Finally, the total value of Lake Country infrastructure is about $250 million. Half of it needs to be replaced in the next 20 to 30 years as it is aging and deteriorating. This is prevalent in all Canada and all municipalities have been or are going to raise money, specifically to address this issue. It is called infrastructure deficit, in the sense that money is needed to be set aside for future repairs or rebuild. In the case of Lake Country, in order to adequately address this issue, the District needs to spend an average of $4.2 million in capital projects on roads, water, sewer and other infrastructure annually. In 2010, only $500,000 from property taxes, parcel tax, and direct fees were spent for this purpose. Staff are recommending that a long term solution be sought to achieve the appropriate level of funding. “We have a responsibility to create a long-term strategy” Councillor Geoff Greenwell said during the meeting.

“Staff have outlined our options in a very informative manner” Mayor James Baker said, “we need to look at the future and we need to expand our tax base to make our budget and quality of life sustainable in Lake Country and what we heard is the right way of doing it.”

De Feo closed his presentation by telling Council that options will be provided with the intent to look at a fair distribution of the burden. “Although, we do not have control over the assessment of property values, we are sensitive to the impact of any increases to individuals and families” De Feo said, “However, the community owns this infrastructure and it understands the need to keep it to a reasonable level of enjoyment and use, not just for the time being but also for future generations.

Again, Council will review a detailed budget and 5-year financial plan at its January 25^th Special Meeting.

Click here to view the full report to Council that outlines the current financial situation (revenues & expenses), comparison revenues (expenditures), allocation of property tax and user fees and an analysis of the 2010 budget.

For more information contact: Mayor James Baker, Phone: 250-766-6670 email admin@lakecountry.bc.ca