City council in Williams Lake voted four to two Jan. 21 in favour of directing staff to cut capital projects in order to make way for a cut in the municipal tax rate.
Despite a budget put forward by staff at the committee of the whole meeting, which staff said is needed to maintain current services and infrastructure, council have asked them to continue to look for savings and cut some capital projects from the 2025 budget.
"Staff has presented council with what we need to do to keep the lights on and keep the assets at a certain level," said Gary Muraca, chief administrative officer for the city.
"It comes down to a political decision of council," he said.
"You as a council are determining risk."
While Muraca said staff can appreciate there are unknowns, he cautioned council there are costs coming they will not be able to avoid. Projects deferred now could cost the city more later on.
Despite this cautionary note, Coun. Scott Nelson pushed hard at the committee of the whole meeting for the city to look at reducing the city's tax rate, despite having to defer projects to address a shortfall in the city's five-year financial plan.
At a previous budget discussion, council had tentatively planned to maintain the same tax rate and leave any increase in taxes to be determined by changes in assessments, but leaving the door open for changes in the rate, depending on property assessments.
With no change to the city's rate, increases in total assessments would put the city's revenues up over $1.4 million, after an overall eight per cent increase in assessments.
Council went back and forth in their discussion, with Nelson citing uncertainties in the future as reasons to reduce the tax rate. Nelson raised the spectres of looming tariffs and impacts to the forest industry and the potential loss of Atlantic Power's biomass plant in the community as reasons to cut costs. Currently, local mills and the energy plant are still paying taxes, it is the possibility of losing these industrial taxpayers which Nelson cited as reasons for cutting capital costs.
However, some councillors pushed back on Nelson's desire for lowering the tax rate.
"Our sidewalks downtown are falling apart, our parking lots are in horrible condition," argued Coun. Jazmyn Lyons, who acknowledged an increase of 15 per cent in her assessment and the associated increase in her tax bill will be an "ouch" for her.
However, she argued the city needs to ensure the funds are there for critical infrastructure, so she was against decreasing the city's tax rate.
"How much do we want to keep pushing off and pushing off and pushing off," she asked her fellow council members.
"I'm OK with deferring and then as need be, as things come up we can figure those things out, because there might be a lot of other things coming up," countered Coun. Sheila Boehm.
Mayor Surinderpal Rathor said the assessment value of his home has gone up nearly 13 per cent and his father's has gone up 11 per cent.
Rathor later told The Tribune he wants to leave citizens with something in their pocket given the current uncertainties. He said council is trying to find a "happy medium" between increasing the city's revenues to offset rising costs, while also not giving taxpayers a huge shock.
Nelson argued he was taking the "cautious and conservative" approach in the longer term, with so much uncertainty around industrial taxpayers in the city like Atlantic Power and the mills under the possibility of lumber tariffs.
Rathor asked Nelson how his outlook had changed so much, given Nelson had only recently posted on his social media how positive the outlook is for the city after a 20-year record number of business licenses were issued in the city in 2024, but Nelson argued despite some positive signs, people are hurting.
"I don't want to see the money being borrowed," said Rathor, emphasizing the city has to be very careful what gets built, but the water treatment plant project underway could potentially see cost overruns.
Coun. Angie Delainey said she feels the city needs to ensure they can maintain core services and keep up with inflation.
"I don't want to mess around with the mill rate," said Delainey, emphasizing the city needs to maintain infrastructure, and brought up the input received from the community. She requested Vitali Kozubenko, chief financial officer, give the council guidance on the best strategy to maintain the city's assets and infrastructure.
"I really don't like reactionary mode because you pay more," said Delainey but said she acknowledged the precarious position the city is in with threats to the budget. She proposed the city look at some options and see what other cities are doing such as housing development corporations or partnering with another area First Nation on a community forest. She then voted in favour of asking the staff to make additional cuts to the capital budget and to adjust the tax rate to result in an overall tax increase of five per cent.
Coun. Michael Moses said he believed the city should follow the staff's recommendation and allow taxation to keep up with inflation.
"This is to help ensure that our community gets the services that they deserve and that they've grown accustomed to," he said, noting input from the community indicated a desire for improvements to increase livability.
Rathor said nothing had changed since the initial decision by council to look for a zero per cent tax rate increase on the city's part, and pushed for Nelson to agree to stick to the agreed upon direction to staff.
By the end of the meeting, staff was asked to select an estimated $500,000 in projects to defer.
Council voted four-two in favour of asking staff to bring back an amended budget in order to result in an average increase in tax revenue to five per cent. Boehm, Rathor, Nelson and Delainey voted in favour of the motion, while Moses and Lyons voted against.
Coun. Joan Flaspohler was absent.
The recommendation will now go to a regular council meeting for adoption in order for the budget to move forward.
