Tax increase eyed at 7.9%

Nanaimo residential taxpayers face a 7.9 per cent property tax increase this year, the largest jump since 1991.

But it could have been worse.

Mayor Gary Korpan spoke in early January of a larger increase, and in a report to council, Brian Clemens, city director of finance, said the initial draft of the new financial plan required an 11.2 per cent increase in 2007.

Clemens said council came to staff, asking if the budget could be smoothed out. A review and deferment of the Comox Road and Island Highway to Cliff Street upgrade project ($2.1 million) helped bring the number down.

“We probably changed a couple of things, added others but [Comox Road and Island Highway] is the major one,” said Clemens.

“It’s always hard to talk about this because there are hundreds, or even thousands of changes and we try to boil it down to keep it simple.”

And there is always a chance it could go lower

“Staff spends a lot of time on this and present to council the cost of services we think council wants to provide,” said Clemens.

“There can be changes. In my experience, the changes aren’t huge. But sometimes they certainly have the opportunity to impact the budget.”

Reasoning behind a tax increase that has historically been around three per cent for the last 10 years includes lost property tax revenue of the Island Phoenix mill ($469,000), first debt payments ($15 million) on the New Nanaimo Centre, increased costs for removal of the foundry building and soil remediation, inflationary items such as wages and fuel increases.

Under the 10-year Fire Plan, the new Chase River fire hall will require borrowing $3.7 million, but debt repayment will not begin until 2008.

“It’s an improvement from the first draft of the budget, but it is also indicative of the fact there are so many things government is expected to be doing and, some people think, should be doing,” said Korpan.

“And all of those things cost money.”

Projected costs for the financial plan include 4.8 per cent in 2008, 1.9 per cent in 2009, 3.5 per cent in 2010 and 2.6 per cent in 2011. There will also be a five per cent increase in water rates beginning in July with revenue going toward the city’s 20-year-water plan.

“We have to start collecting now to reduce future costs of updating the water system,” said Coun. Jeet Manhas.

The 7.9 per cent increase does not include any tax increases by other agencies including school district, hospital, library or Regional District of Nanaimo.

There will be no increase in garbage or sewer rates.

The total 2007 city budget is expected to be more than $153 million.

For more information on the city budget, please go to www.nanaimo.ca.

online@nanaimobulletin.com

Comment on this story.

COMMENTING RULES: We encourage an open exchange of ideas in our online community, but we ask you to follow our guidelines for respecting community standards. In a nutshell, don't say anything you wouldn't want your mother to read. Please see our FAQ if you have questions or concerns about using Facebook to comment.