Nakusp residents can expect a 1 percent tax increase in the coming year.
In their May 3 meeting, the Nakusp Village Council voted unanimously to prepare a budget with a 1 percent tax hike that will bring in an additional $8,400 into village coffers, which will in turn help begin to restore the Village’s capital reserve.
The council was expected to receive staff recommendations for a budget in the May 9 meeting based on a 1 percent tax increase expected to help the Village restore its capital reserve fund.
A 2 percent tax hike was possible, but the council voted to hold the line at 1 percent.
The average Nakusp single family home price is $209,000, which represents a 6 percent decrease in property valuations, councillors were told.
The average home will see a tax bill increase of $6.09, Village administrator Linda Tynan said.
This year, between Homeowners grants and upgrades to the Northern Allowance arising from the Northern and Rural Homeowner benefit, the average single family property owner will get an additional $200 to help with their residential tax bill.
The 1 percent tax hike doesn’t address the operating deficit which has accumulated in past years in the Village, Tynan said.
“It’s been a few years in a row of really heavy capital projects so there’s been a lot of impact on the operating budget,” she said.
As long as the operating budget evens out, the Village should have enough of an annual surplus to eliminate its operating deficit within five years, Tynan said.
“I think the steps we’re taking this year — doing the borrowing, really analyzing the budget more than it has been (will help),” Tynan said.
“It’s important to know that we still need to keep a close watch on that.”
The budget would include $10,000 for an arena slab and $10,000 for the beginning of a capital reserve fund, which would be formalized by a bylaw after apparently having had a similar bylaw rescinded in the past, Tynan said.
An additional $20,000 had to be added to the snowplow budget after a winter of uncharacteristically high snow levels.
It’s possible that plans for a dehumidifier for the arena and a lighting retrofit may be able to be funded by the provincial gas tax since they represent savings on power and, in the case of the dehumidifier, a move away from propane power.
Mayor Karen Hamling said she’s reluctant to delay funding for entrance signage to the city.
“It’s been in the budget since 2005 and it keeps getting put off,” she said, adding that the public works department may be drafted for at least a temporary fix for the signage.
The budget emerging in last week’s meeting included a low interest borrowing package of $698,000 that would realign debt accumulated to repair the Village-owned Nakusp Hot Springs to the facility.
With a low ratio of debt to revenue, the Village is under the threshold of having to ask government permission to borrow, Tynan said.
“This debenture gives us some stability and starts to move forward but it does not address the long term capital (issue),” she said.
The purchases the Village needs to make this year can be funded through the equipment reserve fund, which contains depreciation funds set aside for future purchases.
The borrowing will include $50,000 for water source protection.
Under the plan drafted in recent days with the help of Village staff, a drainage study will be deferred to 2012.
Nakusp residents will probably face increases for water and sewer fees in the future, Tynan said.
Operating costs are expected to increase with the increases to capacity at the sewer plant, she said.
User rates currently only bring in enough to contribute $35,000 to the capital fund, she said.
“For this year, it’s sustainable, but the sewer rates will definitely have to be looked at next year for 2012,” Tynan said.
Asked why the Village went to a more expensive system, the answer was capacity, the mayor said.
“Capacity and operations … once you pass a certain capacity, you’re into a different set of regulations, and it requires more staffing and testing, etcetera. In order to have the growth, we needed to have the water and sewer (increased capacity.) Once we had that, it got us into more expensive management of it,” Hamling said.
“The regulations are coming down on water and sewer and that yet there’s no funding to match that … The powers that be are making the regulations — they are going ahead and doing it and not considering the capacity for communities,” she said.
When the meeting was opened to public comment, local resident Rob Parkinson asked what developments made the capacity increases necessary.
“If we were to go with no more development, we could stay with what we had,” said Hamling, adding that another 30-40 homes are planned, with several large developments waiting for capacity increases, including one just past Kuskanax Creek.
“That’s going to be quite a large one,” Hamling said.
Councillor Joseph Hughes said he was pleased with the way the budget was shaping up.
“I’m going to play devil’s advocate and point out that even though the hot springs did put us in this situation … in 12-14 years when the repair is paid off, if things can go as well as they have right now it is still giving us a substantial amount of money,” he said.
Hamling said the Village is also out money on the hot springs.
“We’re well into $1 million that we’ve put in … and we’re not getting back,” she said.
“Ditto for the arena,” another councillor responded via teleconferencing.
There can also be a time in the future when the council wants to go back to the public with a referendum and see if the public wants to cover the hot springs with taxes like the Village does with the arena, Hamling responded.
The council is expected to meet at 6:30 p.m. in the Village chambers for a final reading of the budget, after preliminary readings on May 10.
