The City of Port Alberni may need to pull back on services in order to keep municipal taxes to a manageable increase in 2017 while still funding necessary capital projects, says new CAO Tim Pley.
The city’s five-year financial plan 2016 – 2020, that was adopted in May 2016, included an anticipated 17.1 per cent budget increase in 2017, but Pley suggests three per cent would be more realistic.
“I don’t think any of us thought we were going to increase our spending by 17 per cent next year,” Tim Pley, City of Port Alberni CAO, said at an Oct. 24 council meeting.
When introducing the city’s upcoming budget process for its five-year financial plan (2017-2021), Pley stated that the city is experiencing an infrastructure deficit.
“This is something facing local governments all across North America because infrastructure is aging and costs to renew the infrastructure is beyond the capacity of governments,” Pley said. “We’re patching and hoping the patching will last a little longer and hoping that some money will emerge.”
Pley suggests targeting a tax increase of three per cent.
“If inflation is 1.5 to 2 per cent for example, if we increase taxes moderately above that and we stem moderately below that, then over the course of time we’re going to start to free up some money and we can put that money into infrastructure.”
Decreasing city spending over a long period of time, Pley said would mean services may also need to be decreased.
“We’re going to have to scale back intelligently and decide which services to provide to a lesser extent and which services we stop providing all together,” Pley said. “We need to strongly resist taking on new services.”
The lack of population growth in the city was also taken into account when planning for the five-year financial plan.
“We were a little over 20,000 people in 1980 and today we’re 17,500,” Pley said. “We’re trying to grow and I hope that we grow but if you look backwards over the past 30-35 years we haven’t grown and that has been a problem for us when we’re relying on the same tax base.
“If you look back at the trend we have to start asking ourselves if there’s going to be growth in the next five years and if there is, terrific, but what are the indicators that there will be growth and so we can budget and plan on growth and prosperity or we budget conservatively.”
Pley said the city needs to plan long-term and stick with the plan that they make.
“It’s one thing to draw it up…but we need to follow it day after day,” Pley said. “In early November it will be time to give direction on what we want 2021 to look like and then senior staff and myself will work on developing a draft budget.”