Sylvan Lake residents, like those living in most central Alberta communities, are facing bigger tax increases in 2023 than they have seen in years.
A 5.5 per cent municipal tax rate increase is proposed in the town’s operating budget that council reviewed Dec. 12 and will now be circulated to the public for comment. Council passed an interim budget of $10 million to cover expenses before final budget approval on March 27. Last year’s operating budget was about $42 million.
“With minimal assessment growth, combined with a zero per cent municipal tax rate increase for two consecutive years, the town’s base from which to generate additional tax revenue has not grown,” says a budget report for council. “The town experienced a $1.8 million operating shortfall for the 2021 fiscal year. These shortfalls each were covered by accumulated surpluses of prior years.
“Continued reliance on the accumulated equity of the town is not sustainable.”
Mayor Megan Hanson said inflation is the main driver behind the proposed tax increase. “We’ve kept a really low tax rate the last three years. Last year, we did 3.8 per cent increase and there were two years of zero before that. Six years before that were all under two per cent.
“We’ve had a number of years where we have been substantially behind what the inflation rate or CPI (consumer price index) was across Alberta.
“This year, it just caught up to us.” The CPI in October was nearly seven per cent.
The tax increase is expected to generate about $940,000. Assessment growth could add another $160,000.
Even with the tax rate increase, Sylvan Lake’s residential tax rate remains the second lowest among 11 comparable Alberta communities, according to a chart in the budget report. The town’s commercial rate is roughly in the middle of the pack among 26 communities surveyed.
Residents were surveyed this fall so council could get a better handle on the community’s expectations as it began its annual number crunching.
“The answer we got overwhelmingly from residents was they were looking at us to maintain service levels with inflation and not make cuts and go in the other direction,” said Hanson, adding residents also did not want to see tax increases above inflation.
Hanson acknowledged some residents may be taken aback by the first significant tax increase in many years. “But at the end of the day, every item in our budget we can go through and provide pretty great justification for it. It’s really just that maintenance of services.”
The public can get an overview of the town’s spending plans on Jan. 18 at the NexSource Centre from 6 to 8 p.m. An online feedback survey closes Feb. 26.
Among the financial pressures being faced is declining provincial Municipal Sustainable Initiative funding, which is expected to be 60 per cent less in 2023 and 2024 than it was in 2021. As well, the town must now pick up 90 per cent of policing costs, which last year prompted council to reduce the number of RCMP officers in town to 15 from 16, while boosting municipal enforcement. A cost of living adjustment of 3.4 per cent for staff is also built into the budget.
Among the few additions to the budget is a grant writer position to help the town tap into funds from other levels of government. “I think it’s going to bring huge community benefit back to us when it comes to helping offset grant dollars, both for the Town of Sylvan Lake but also for some of our community groups that do great things.”
Hanson is also keen to see a new investment attraction strategy rolled out to boost economic development. About $7 million is expected to be spent on Pogadl Park, a huge recreation area on the west side of town. That will add another $550,000 to the operating budget in debt repayment. The $17.9 million capital plan approved on Monday includes $3.6 million for various road projects, and $4.9 million for utility projects, including $1.24 million to reclaim a sewage lagoon and $1.2 million to decommission a pump station. Another $1.3 million will be spent on a new fire engine