Port Alberni city council will spend the next few months shaving down the 2024-2028 five-year financial plan, but city staff warn that the tax increase for this year is likely to remain in the double digits due to cost escalation beyond their control.
Council gave first reading to the proposed budget during a regular council meeting on Monday, Feb. 12. The financial plan proposes a 16.86 percent tax increase for the year of 2024.
READ MORE: Port Alberni unveils double-digit tax increase in first look at 2024 budget
However, financial manager Andrew McGifford told councillors on Feb. 12 that the budget has already been trimmed down considerably. Work on the budget began in early fall 2023, and the first draft of the budget proposed a 25-26 percent tax increase.
“We knew that was something that wouldn’t be supported by council, so we had to look at what we had to do to bring the budget down to the service levels we currently provide, with a few additional items,” McGifford said.
The city will be spending more than a quarter of a million dollars just on equipment replacement. McGifford said that cost escalation this year means some of this equipment replacement is being funded through taxation instead of the Equipment Replacement Reserve Fund (ERRF).
“When we bring forward an ERRF replacement, it is because it is needed,” he said. “It’s breaking down, it’s worn out, so we need to replace. Everything we can push, we push forward. Everything we’ve done there is to get that dollar value as low as we could.”
Another pricey line item shows the city spending $600,000 on “facility upgrades.” Port Alberni Mayor Sharie Minions asked for this to be broken down so councillors can see exactly what upgrades they are approving.
City staff have also proposed funding the final $1,253,411 of the Connect the Quays pathway in 2024, but this will come out of the Growing Communities Fund and will not impact taxation. The province provided the city with $5.2 million under this fund last year to be used for infrastructure costs.
Councillor Cindy Solda warned that no matter how much spending they cut from capital projects, the tax increase this year will likely remain in the double digits because fixed costs alone make up an almost 13 percent increase. Fixed costs include things like insurance, contracts and staff salaries.
“With fixed costs, we have no choice,” said Solda.
The draft budget is available to view online at www.portalberni.ca/budget. Council must adopt the budget by May 14.
Councillor Charles Mealey invited members of the public to attend upcoming committee of the whole meetings on Tuesday, Feb. 20 and Monday, March 4 to provide their input and feedback. Committee of the whole meetings take place at 6 p.m. in council chambers.
“You can come in person and have a discussion,” said Mealey.