The idea of a zero per cent increase was on the table, but in the end Grande Prairie city council has gone forward with a planned two per cent municipal tax increase.
Councillor Chris Thiessen brought forward the idea of forgoing the increase to the tax rate, though he credits the initial idea to Councillor Wade Pilat who could not attend Monday’s meeting. Thiessen and Pilat were in favour of applying surplus dollars from 2017 to the 2018 operating budget. Thiessen says that would have given them another year to look at ways to avoid future increases.
“I saw it as something we could definitely do that was a potential low risk that would motivate our employees to hopefully try to budget at the zero per cent rather than an over-charge surplus that goes into the reserves. We already build money to go into our reserves through our budget process.”
Administration had prepared a number of budget scenarios, including one for a zero per cent increase. Mayor Bill Given says since there is uncertainty around provincial funding in the future with an election looming in 2019 now didn’t seem like the right time to spend the dollars.
“We don’t know necessarily which party is going to be in place after that election in 2019 and so we don’t know what provincial funding may look like in our next budget year. That’s one of the reasons why I was a supporter of maintaining some additional financial flexibility.”
The reserve fund money is used as part of the city’s investment portfolio. The returns off those investments can also be quite valuable, something Mayor Given also said should be considered.
The motion put forward by Councillor Thiessen was unanimously voted down. The $2.6 million dollars from 2017 will be moved to the Stabilization Reserve Fund and the two per cent increase will go ahead. That will be an average increase of $69 to homeowners in the city of Grande Prairie.