Municipal property taxes are going up following adoption of the 2021 rates bylaw by city council on Monday evening.
The 2021 tax levy represents a 2.35 per cent increase over last year, which breaks down to a general increase of 1.35 per cent due to inflationary pressures on operating costs, and a one per cent dedicated road tax for road upgrades and repairs, according to a staff report.
“It was a lot of work by staff and everybody trying to make sure that the taxes we are charging are realistic and fiscally responsible so good job by everybody involved in that,” said Cranbrook Mayor Lee Pratt, following the unanimous vote.
While city council adopted the 2021 tax levy bylaw, mayor and council also heard from an independent auditor who went over last year’s consolidated financial statements as part of annual municipal financial reporting requirements set out by the provincial government.
According to the City of Cranbrook consolidated financial statement of operations for 2020, the city budgeted a surplus of $1 million, but had an actual surplus of $12.7 million, which was attributed to grants from the provincial and federal governments, sale of the former Tembec industrial lands and reduced expenses due to COVID-19.
Total revenues came in at $57.1 million actual, while budgeted at $51 million. On the flip side, operating expenses were budgeted at $49 million, but came in at $44.4 million actual.
Municipal taxes collected approximately $31 million, while other revenues were higher than expected, such as provincial government grants — budgeted at $835,267, but came in at $5 million actual largely due to Safe Restart funding. Approximately $7 million in revenue was generated through utility fees and a further $7 million from the sale of services and fees.
Additionally, budgeted expenses and costs were lower, due to deferred projects or a decrease in wages. For example. budgeted expenses relating to Public Works and Western Financial Place were both down by $1 million each, largely related to issues posed by COVID-19.
“The financial results for the year are actually fairly strong,” said Harley Lee, a chartered accountant with BDO Canada who presented the independent audit to council. “There were some grants received from the province that has not yet been spent yet, so your cash position is strong. From a revenue perspective, you end up with revenue more than budget, a few things transpired during the year for that, including a settlement, including the sale of a property.
“Then on the expense side, with different operations, being shut down or different closures because of COVID, there were some cost savings, so for the year, you end up with a bit of a surplus, but a lot of that has been reserved and set aside for future spending.”
Finance Director Charlotte Osborne walked council through a draft report of the audited financial statements during a council meeting two weeks ago, ahead of the independent auditor’s presentation on Monday, May 10.
Additionally, senior staff recently met with council to discuss the future of reserve and surplus funds. Council passed a policy last summer that provides guidance to administration on the issue, such as establishing minimum balances for reserve funds.
Administration is currently creating a new bylaw for reserve funds, which consolidates the number of reserve funds and help guide future strategic asset management, particularly for capital project spending, in the context of utilizing a mix of sources of funding, such as through taxation or borrowing.
Staff met with council last week for a meeting on a proposed reserve fund establishment bylaw, with an eye to formally bring a new bylaw forward for consideration in the coming weeks.