Iqaluit council puts priority on limiting residential taxes
City growth, capital projects, demand from all sectors make for rousing budget debates
Iqaluit City Council grappled with the question of how to limit the tax increases on home owners, Wednesday, Jan. 22, scouring departmental budgets for possible savings.
But ballooning demands across the board, and differences of opinion on how to save money, kept councillors and administrators from concluding the 2014 budget on day five of deliberations, Jan. 22.
Hopes to limit the mill rate increase to $1 across all properties were dashed when council realized they added more expenses than expected, which limited their ability to curb expenses with a list drafted in their previous meeting, Jan. 15.
On city councillor Mark Morrissey’s advice, council and administration agreed to keep the mill rate increases at $3 per $1,000 valuation on industrial and institutional properties, as outlined in the original budget presented by administration Jan. 9.
But for residential and commercial properties, councillors agreed a $3 increase would be too hefty so they stuck to their plan to limit this increase to $1 for the benefit of homeowners and renters.
With that, council instructed the city’s senior administrative officer, John Hussey, to meet with directors of each city department to cut just enough to keep commercial and residential property taxes from rising more than $1 per $1,000, or $1 mill. Council’s finance committee will meet again Jan. 27 to review changes.
Old debates and suspicions among councillors resurfaced in the Jan. 22 meeting, as council’s finance committee discussed how to cut expenses.
The new aquatic centre, still opposed by some councillors and residents, was one such debate.
Questions related to the pool, expensed at $32 million total, were quashed after mayor John Graham reminded council that the city had already cut the cost by $10 million from its original 2010 estimate of $42 million.
He also pointed out that councillors had “to respect a decision” that had been made by council in consultation with residents.
Asked about the possibility of cutting further amounts from the pool project, Graham said that it’s in the design stage and any attempts to cut costs further might “shave three per cent off the design,” at best.
Recreation director Amy Elgersma gave a list of reasons why she opposed cutting the aquatic centre, emphasizing that the future facility “is an attraction for Iqaluit,” saying it will bring economic benefit to the community by attracting newcomers as well as local youth and families.
Elgersma gave a lengthy report on possible budget cuts in her department in response to council’s call to all departments – the only director to do so at the meeting.
Elgersma’s proposed cuts to recreation amounted to about $180,000 in savings. This would save enough on the budget to bring the mill rate down by about $0.5, according to the city’s calculation.
Part of Elgersma’s proposal included an increase in recreation fees, which the department has not changed since 2005, she said.
The city’s department of public works, represented at the meeting by operations superintendent Joe Brown, flatly opposed any cuts to their operations.
“We are a growing city and we need more equipment, going forward,” he told the finance committee.
Councillors agreed, and quickly nixed most proposed cuts to the department. Cancelled cuts included the purchase of a hydraulic hammer, and installation of a security fence around a public works facility.
As in past meetings, Coun. Kenny Bell pointed to the city’s reserve funds, asking why the city could not cut back on these.
“All we have to do is cut $1.2 million out of this $3 million of reserve funds,” he said. “It would be the simplest thing to do. We’re not taking from people and we’re not charging them more.”
“I absolutely disagree with you,” said Coun. Romeyn Stevenson, who led the meeting as chair of the city’s finance committee. Through the reserves, “we are planning for the future,” he added.
“In every single one of the reserves, we are planning to spend every single penny.”
“I know you think you’re planning for everything,” Bell replied. “But we’re so far behind in everything, that we’re going to have to continuously raise fees every single year from now on. We have to raise taxes to cover $4 million in operating costs – and that’s just an estimate.”
Proposed changes to garbage collection fees also re-emerged.
The city’s director of corporate services, John Mabberi-Mudonyi, pointed out that a recent call by council to include an incinerator in the city’s waste plan as soon as possible means the city will have to raise garbage collection fees by more than 30 per cent over the next three years.
Advancing the order for an incinerator by one year means garbage collection fees will have to be raised by 63 per cent, according to the city’s department of engineering.
“That’s an artificial number,” Bell said. “It doesn’t actually exist or matter,” he added, because costs of an incinerator are not yet known.
Council will meet again to discuss cuts to the city’s 2014 budget on Jan. 27.