The first of a three-part report by District of Saanich staff was brought to council on Monday, exploring why the municipality’s annual property tax increases are as much as four per cent beyond the consumer price index.
In the past five years, Saanich has increased property taxes 5.72, 4.63, 4.45, 3.97 and 4.65 per cent (in 2015). Each of those raises are no less than 2.97 per cent above the CPI for Victoria, the cost of living model generally used to measure tax hikes.
Coun. Vic Derman was one of the first to support an in-depth look at the matter.
“I thought it would benefit council and the public at large to know what are the [significant] sources of Saanich’s costs and why this is taking place,” Derman said.
“And what it really stems from is the problem of how to engage public input into the budget process. By the time it reaches council in late February or March, it’s a complex budget that’s pretty fleshed out with limited ability for public to make changes. [The] public get the feeling it’s pretty well complete.”
Monday’s report showed the annual fees Saanich pays for CRD Regional Sewage had jumped 6.5 per cent in 2011, followed by a 15.6 per cent in 2013, 7.1 in 2014 and 8.3 this year.
Admittedly, sewer and piping is sinking Saanich’s budget at the moment, as the district is playing catchup with a one to 1.5 per cent increase for capital maintenance and repairs. The city has been stuck with emergency repair bills for broken pipes and other incidents that far outweigh the regular, planned maintenance for the same costs.
“That one to 1.5 per cent per year is simply a catchup measure to cover the maintenance and replacement for infrastructure to get Saanich in the proper financial position [it] should have been in all along,” Derman said.
“It wasn’t budgeted for in earlier times. Now it’s nearly eight years running. And we’re not there yet.”
What we’re really seeing, Derman added, is the result of the downloading of responsibilities from the provincial and federal governments.
“Their share of infrastructure costs are funded less and less, which is inappropriate as the bulk of their revenue is from cities and towns, so you’d think they need to keep cities and towns healthy,” he said. “If you look back, they would contribute considerably more to [municipal projects].”
The coming second report will be reviewed at the July 13 council meeting, with a focus on what Saanich can do to increase its revenue streams, followed by subsequent questions; what are the implications of cutting substantially at this point.
“I thought the report (on Monday) was very complete and well done,” Derman said. “It covered what the areas are that are causing this situation. Eventually, Saanich needs a way, at some point, to moderate the need for property tax increases.”
One way to do that is by encouraging urban density with any Saanich residential development and disallowing sprawl, Derman said. The Douglas Corridor and Shelbourne Valley are key areas where Saanich wishes to encourage density.
“It’s something we really needed [and] should have done, by my view, about 10 years ago. We should be planning for new development in the right places and in the right way. With compact development that can make use of existing infrastructure. With sprawl, which brings an immediate rush of tax (revenue), but in the long term you inherit the (less sustainable model) of maintaining that sprawled infrastructure.”
A third report will visit the issues of what, where and how Saanich can possibly cut costs. If it means cutting services, then Saanich wants to have public input with reaction to which services could be cut.
“If it’s salaries [which are largest at the union level], there’s going to be some tough negotiations. If it’s services or programming, then which ones,” Derman said.
Saanich resident Hadji Charania, a regular at council, was the only member of the public to speak in light of the report, questioning “who is accountable for the hefty increases, and who is managing this in the future?”
“I suggest a cap on budget increases, and I suggest a deeper look into the operation of Saanich,” Charania said.