BARRHEAD – County of Barrhead residents may notice an increase when they receive their property tax bills later this spring.
That is because councillors decided to increase the mill rate by one per cent, as per the 2022 Property Tax Bylaw, during their April 19 meeting by a 4-3 vote, after considerable debate.
Reeve Doug Drozd, Coun. Ron Kleinfeldt, Coun. Walter Preugschas and Coun. Paul Properzi voted in favour of the bylaw, while deputy reeve Marvin Schatz, Coun. Jared Stoik and Coun. Bill Lane were opposed.
It is the first increase in the mill rate since 2019.
The bylaw also set a minimum tax owed per property at $50.
The mill rate is the amount of tax payable per $100,000 of assessed value.
The mill rate for residential and non-residential properties was set at 6.1431 and 17.5109 per cent, respectively.
The rate for linear assessment (both pipe and power and machinery and equipment) for residential and non-residential and farmland will be 17.5109 and 16.9628 per cent, respectively. It is worth mentioning that the later rates are set by the province.
The Alberta School Foundation Fund (ASFF) and Opted Out School Board (OOSB) of Evergreen CRSD has been set at 2.6319 for residential and farmland properties. For non-residential properties, the rate is 4.0072 per cent. The Barrhead and District Social Housing Association (BDSHA) requisition for seniors' housing rate is 0.1235 per cent.
Again, it is worth mentioning that the province sets the above rates and municipalities collect the requisitions for the provincial government.
Finance director Tamara Molzahn noted the mill rate increase equates to $88,633 in extra tax revenue.
Earlier in the meeting, as part of the 2022 Operating Budget presentation, she noted the average $250,000 residential property saw residential assessments rise an average of 1.4 per cent. As a result, she said residents would see their tax bill increase by roughly 3.1 per cent or $81 from last year.
She also added that under the Municipal Government Act (MGA), municipalities are allowed to set tax minimums.
Molzahn said these minimums vary widely, ranging from Barrhead's $50 to $800, or even higher. She added that in the past, the municipality issued tax bills as small as $2 or less, which did not even pay for the administration costs.
"We are proposing that all properties should contribute something to the running of the municipality," Molzahn said.
She noted the 2022 Budget councillors passed earlier in the meeting requires that tax revenue meet the municipality's expenditures and transfers along with the requisitions (school, seniors social housing and designated industrial) that they collect on behalf of the province, totalling $11,791,366.
Drozd supported the increase, noting due to inflationary pressures, even with a one per cent increase, they were still "sliding backwards."
He added that it was important that they start adding to the municipality's tax stabilization fund.
Council created the fund several years ago, mainly in response to the number of companies in the energy sector that were defaulting on their property tax bills.
"We are in a good situation right now, but things can change rapidly," he said. "We appreciated having the fund to dip into so that we did not have to put all that on the backs of our taxpayers by significantly increasing their tax bills."
Kleinfeldt and Preugschas agreed.
"When we are giving our staff a four per cent wage increase. That is one of our major expenses. You are right in saying that we are going backwards," Preugschas added. "But I understand why it is attractive not to increase the tax rate, but we have to keep up."
Stoik disagreed, noting that when they approved the interim budget, it had a deficit of roughly $500,000, and through further budget deliberations they were able to whittle it down to about $117,000.
"Now we are increasing our mill rate to raise $88,000," he said. "I understand that we want to be progressive and not get behind, but I think there are places we can find that money."
Schatz agreed, saying for the last two years after the dust settled, the municipality end the years with unbudgeted surpluses.
Later in the meeting, Schatz proposed an amendment to the bylaw seeking a zero per cent increase. It was defeated 4-3, with Drozd, Kleinfeldt, Preugschas and Properzi opposed.
"I am having a hard time voting for even a one per cent increase," Schatz said. "For the amount we are getting — less than $90,000 — it would be easy enough to get it from tax stabilization and go with a zero per cent increase."
Stoik interjected that due to inflation, county residents are feeling the pinch and the tax increase is just another item adding to the financial strain that many are feeling.
Lane said the county is also making efforts to expand its tax base (referring to GFR Ingredients purchasing two lots at the municipality's Kiel Industrial Park) that could make the mill rate increase unnecessary.
However, it should be noted that it is unlikely that the municipality would see any tax revenue from the sale for up to three years, as its planned improvements for the property would be included in the county's Non-Residential Tax Incentive Bylaw.
Under the bylaw, a non-residential property that made improvements through new construction, machinery and/or replacing or upgrading a facility that increased the assessed value is eligible to receive a portion of their property tax exempted for up to three years. The amount exempted depends on the value of improvements made to the property.
Drozd cautioned that much of the surpluses over the last two years were due to projects not being completed on schedule.
Kleinfeldt added they would not be having the discussion if the municipality did not have to collect the education tax for the province, noting the school requisition accounted for nearly 25 per cent of property tax collected.
"It's out of our control," he said.
Stoik still argued that he believed the extra $88,633 could be "made up" elsewhere.
Drozd said that with the administration's help, council had, during budget workshops, reduced the deficit faced to $117,000, adding it was only by dipping into their reserves that they were able to balance the budget even with the mill rate increase.
Molzahn added that if council opted for no increase, the actual budget deficit would balloon to more than $205,000, saying to make up the difference, they would need to dip even more into reserves.
"This comes at a time when we should be replenishing them, in case we run into trouble again," Drozd said. "If we don't increase our mill rate now and we run into trouble next year or the year after, we are going to have to increase the rate by a much higher number."
Barry Kerton, TownandCountryToday.com
