Five weeks after City Council passed the 2019 Municipal Operating Budget, the municipality has entered the public hearing stage of this year’s City of Brandon financial plan.
The approved $83.2 million operating budget hosts a 1.17 per cent tax increase this year. Owners of average residential properties – basically, a 40-year-old, 1200-square-foot, three-bedroom, two-bathroom property assessed at $255,000 – will see an additional $21 on their 2019 property tax bill.
A public hearing on the 2019 financial plan will take place at Monday’s city council meeting.
“At a nearly four per cent proposed increase going in, this was one of the toughest budget starting points I’ve seen for both council and administration,” Brandon mayor Rick Chrest said in a Jan. 26 press release announcing the budget’s approval.
“It’s a very good result, under the circumstances. With a lot of expenses out there being increased on homeowners, we’re at least doing our part to keep our expenses reined in.”
The city is expecting revenue drops in several areas, including provincial funding and internally generated revenues from items like permits, licenses, fines and user fees for city facilities. Each of these revenue streams represents 25 per cent of the city’s annual funding. Administrators expect $750,000 less from the Province of Manitoba and $1.25 million less from internal revenues.
Dean Hammond, the City of Brandon’s treasurer and general manager, said the drop in internal revenues is due to a combination of issues, including decreased construction permitting and reduced commercial volumes at the city landfill.
“This combined $2 million revenue shortfall has been addressed by reduced spending where possible, and/or trying to be more creative with other user fees,” he told the Westman Journal by email last week. “We strive to maximize these other revenue sources in order to reduce the burden on taxpayers, but ultimately, property taxes end up being the other half of the revenue equation.”
Options for the city to increase its revenues have come available. Municipalities were granted more latitude in using money from the federal gas tax for projects that were previously ineligible for such funding. The city also had reserves available for use to cover a revenue shortfall.
“On the expense side, we’re always looking for ways to be more efficient with the resources we have, so it’s fair to say that most city departments will have to do more with less in 2019,” Hammond said. “Lastly, in order to bring this year’s property taxation to an acceptable level, council elected to make several cuts to the reserve appropriations for future year’s projects.”
The city is expecting a net tax increase of $1.5 million this year. Hammond said $800,000 of this amount will come from municipal growth such as new properties. The other $700,000 is being borne by the tax increase.
The 1.17 per cent increase does not include potential increases to levies from the Brandon School Division and the provincial department of education.
“From a city treasurer’s perspective, I would comment that municipal property taxes in Brandon are very competitive with other cities and large towns in Manitoba as well as across the Prairie provinces,” said Hammond. “The City of Brandon’s financial strengths are its reserve balances, relatively low debt position and its ability to generate other revenues which ultimately offset property taxes – even though this year was a bit of an anomaly in that regard.”
Hammond said the budgeting process never gets easier with inflationary pressures from labor, construction services, heavy equipment, utilities and fuel expenses.
“While all municipal councils want to keep tax increases minimal, it is a struggle to maintain existing services while making sure that we’re putting away enough to meet our future needs as well,” he said.
Following Monday’s public hearing, the financial plan moves on for adoption at the April 1 city council meeting, then the 2019 tax levy bylaw is scheduled for passage during the meetings on April 1 and April 15.