City serves up financial medicine

Five year plan a bitter pill, but necessary, says council

After eight years of property tax increases that were less than inflation, Richmond residents will be looking at a 23 per cent increase in their tax bill, compounded, over the next five years.

The financial plan was almost unanimously approved, with Coun. Linda Barnes opposed to one item which would delay the construction of the Hamilton firehall by a year to 2005.

The plan pegs this year's tax increase at 4.38, followed by 4.45 (2004), 4.69 (2005), 3.83 (2006) and 3.73 (2007) in future years.

"When you look at the numbers, they're more than any of us want to pay," said Coun. Sue Halsey-Brandt at Monday's council meeting. "But when you live in a city you want to be well-managed, safe and clean, a certain commitment of taxes has to be paid."

The future tax increases exceed anticipated increases in inflation, and some councillors concede the city is playing catch up for low taxes during the recession of the late 1990s.

Rather than pass costs on to the taxpayer, the city at the time eroded its cushions, dipping into both its reserve and surplus funds.

"It's the first time in a long time I see movement in terms of replenishing our reserves," Coun. Derek Dang said.

The city plans to increase its annual contribution to reserve funds by almost $7 million within five yearsmoney that would help pay for the replacement of aging infrastructure from firehalls to dumptrucks to pipes.

On April 23 from 7 p.m. to 9 p.m. in council chambers, the public will be asked for input into the financial plan before it is given final approval, which the city must do by May 15.

Community safety is a major cost-driver behind the property tax increase. While the cost of city services is expected to rise an average of 1.1 per cent per year over the next five years (below the consumer price index), community safety costs are projected to increase five per cent annually.

Many councillors vowed that they will begin immediately on next year's budget with the goal of reducing the proposed increase.

A similar pledge was made last year, and council went line-by-line through every department's budget over the course of several months.

Not a single cut was made.

But "new revenues" is the catch phrase these days.

For instance, the relocation and expansion of Great Canadian Casino is expected to bring in millions more than the $1.8- to $2.7-million annual revenues written into the financial plan.

And Coun. Rob Howard said initiatives such as the city's economic development strategy will help Richmond's business climate, generating more cash for the city's coffers.

"We need a plan, and I'm happy to say that plan's on the way," Howard said.

Mayor Malcolm Brodie stressed the fact that, although it may be too late to reduce this year's tax increase, 2004 to 2007 is a work in progress.

"It would be my hope we would be able to decrease that percentage in 2004," Brodie said.