Council holds firm on tax rate despite rising costs

Sackville will have to do more with less in 2010.

Each of the town's department heads have been asked to tighten their belts and make some tough decisions in their operating budgets for the coming year as the town contends with increased expenses while trying to hold the line on the tax rate.

Sackville's treasurer and acting CAO Michael Beal said as power bills, provincial property taxes and staff salaries continue to rise, so too does the need to be more frugal as council and staff attempt to balance the books.

"The budget continues to get tighter and tighter with very little flexibility," he said following Monday night's budget report at town council's monthly meeting.

During the meeting, council approved the municipality's $8.96 million general operating budget for the new year, up over $8.64 million last year due to higher operating costs projected for 2010.

Coun. John Higham, liaison councillor for the finance department, said that the additional $300,000 in expenses should have resulted in a four-cent increase to municipal taxes.

But instead he was pleased to announce that staff "have been very diligent in fine-tuning their budgets" so that no tax hike would be required.

"We will still be delivering the same level of services plus we will be delivering new services and we're still able to maintain the same tax rate we've been at for the past few years," he said.

Some of the new expenses in this year's budget include: having a full-time fire chief on staff; an increase in firefighter training allowances; an annual increase in RCMP costs; and an increase in short-term financing costs to pay for bills associated with construction of the new town hall/emergency services facility while the town awaits its long-term financing.

Yet despite these added costs, Sackville's tax rate will remain at $1.535 per $100 of assessment, the same rate which was set back in 2004.

This is thanks to another 4.34 per cent increase to the town's tax base, which is made up of new constructions, renovations, as well as a possible increase in assessed value of properties within the municipality.

Higham also explained that this year the provincial government introduced a new property tax accountability mechanism, which actually generated a lower tax rate for the municipality of $1.5289 (by calculating last year's tax base plus the value of new construction plus the rate of inflation). If the town had used that rate, however, that would have meant $31,000 less revenue for the town so the town decided to keep its tax rate the same as last year.

But Higham insisted the province made some "errors" in how the rate was calculated, saying the government didn't include some of the costs it has downloaded onto the municipalities over the past year.

"This new process is missing some of the new costs municipalities now have to carry," he said, pointing to new firefighter insurance benefits and additional planning commission funding that costs Sackville more than $45,000.

As costs to run a municipality continue to rise, councillors say they are concerned about the tough decisions the town will have to make in the next few years.

Coun. Virgil Hammock said he believes the town might need to consider raising its tax rate because more and more residents in the community are asking for "Cadillac" services ever year.

"I like to see new things put in our parks and new events happening . . . the status quo can only go so far," he said.

Local resident Bill Evans said he would have understood if the town had raised the tax rate because Sackville does provide exceptional services to its taxpayers.

"I feel I get good value for my tax dollars," he said.

But Mayor Pat Estabrooks said she wouldn't have felt right hiking residents' taxes when they are faced every year with rising property taxes from the province.

"If we could guarantee that property assessments won't go up, then I think we would have considered that," she said. "But that's a great concern for me."

Coun. Margaret Tusz-King said municipalities will need to get more creative over the next few years and perhaps look at ways to generate more revenue.

"Property taxes are not enough anymore," she said. "We're the government that's closest to the people and we're delivering the services that are closest to the people but we don't have the revenue to support it."

Coun. Merrill Fullerton pointed out, however, that his concern lies with ballooning staffing costs within several departments, particularly finance and administration, recreation, and the civic centre.

"I'd like to see a greater attempt at curbing those costs," he said.

Sackville residents might also be pleased to know that their water and sewer rate will also be maintained at the same level as the past three years, despite a slight increase in operating expenses in the utility operating budget for 2010.

Extra copies of the 2010 operating budget are available at the front desk of town hall.