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City proposes tax increase, lower operating costs

The city says a tax increase is necessary to address financial challenges facing Lloydminster. The third draft of the budget was presented Monday and contains many tweaks and changes from the second draft .

One thing that has been left is the proposed tax increase. The residental mill rate would increase from 4.46 to 5.46, which means that homes valued at $350,000 would see a tax increase of $350 a year or $29 a month. For commercial properties, the increase will be from 7.14 to 9.83, meaning properties valued at $1 million would see a tax increase of $2,692 a year or $224 a month.

Over the last 11 years property taxes in Lloydminster have been kept substantially lower compared to operational costs, something Mayor Gerald Aalbers says is not feasible anymore.

“Basically over the number of years that we’ve had, the city has used monies that was not taxes to pay for things that taxes would traditionally be paid for. So we’ve used water and sewer utilities, excesses from those departments to keep our taxes where they are. We’ve also taken land development money from land sales.”

The increase is also in response to decreased provincial grants.

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The city had been looking at using $440,000 in reserve funds, but that’s no longer in the budget. To make up for that, it’s proposed dropping operating expenses by 1.3 per cent, which is roughly $1 million.

$12.4 million of reserve funds are available for emergencies, while $15.5 are not. Aalbers says that means they’re not prepared in the event of an emergency.

“It worries me because if we have a major snow event on top of what we’ve budgeted for, we will be challenged at the city. And where do we go? To a $170,000 operating reserve. That’s not very much money when we know it costs over a million dollars to do a complete city plowing.”

In terms of capital expenses, draft three presented an 11 per cent increase in the cost of carry-over projects, including $9 million for the proposed waste water treatment plant. This increase will bring total capital costs overall to $51,120,530. The budget draft also proposes $29,799,762 for new projects.

Council is expected to make a final decision on the budget on December 11th. If the third draft is finalized, it would mean a surplus of $606,299.

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