Property Tax Time, Your Home, Your Investment and Community.
Message from the Mayor May 2024.
In May each year, your council finalizes the annual budget that sets the Municipal property tax rate for the year. A preliminary budget was presented and endorsed in January. Following a review of the previous year’s performance in March and reflecting on the goals for the year, staff presented a proposed final draft budget for public review on April 8th. Council will approve this budget on May 7th.
The 2024 budget is a bad news/good news story. Unfortunately, with inflation reaching 8% in 2023, costs of everything from materials, construction, fuel, and personnel have increased well above the usual 2% inflation level. In addition, this winter’s unusual weather patterns have been extremely hard on our local roads and significant repair work is required. Municipal taxes will increase on average 6.5%. I’m sorry, we wish it were not true! This is on the municipal portion of property taxes and does not consider any tax increases set by other levels of government, i.e. the provincial school tax or Regional Hospital or Regional District costs.
When you receive your tax notice in late May or early June, please note that taxes for municipal purposes represent only 39% of the total bill. Provincial school taxes represent some 35% of the bill, Regional District costs are 14% and the Regional Hospital is 7% of the costs and a few minor provincial services add the final 5% to the combined property tax bill. Non-municipal taxes represent more than 61% of your property tax invoice.
There are other Municipal cost increases not reflected in your property taxes and those are the utility costs. Water rates will increase 20% however wastewater costs will remain at last year’s level. This is on top of increases last year. Your council’s goal is to manage each utility as a self funding operation including existing debt servicing. With this year’s increase, we are on a sustainable path and aligned with actual costs.
Total municipal operational spending this year will be $8.54 million. Property taxes will raise some $2.91 million dollars or 34% of these costs. Utilities and other service fees will bring in $3.1 million, so between Municipal property taxes and utility charges and fees, some $6 million is paid by property owners. The remaining funds or $2.53 million is funding from government grants, interest collected, and user/permit fees etc.
Providing safe potable water and treating wastewater to protect our environment is challenging in our mountain environment. Unfortunately, the original anticipated ground water supply (wells) was not sufficient to meet the existing demand and we must store water from the Spring run-off (May and June) and keep it in a reservoir over the summer months to have sufficient water for the winter season. When, our engineers reported that ground water levels were lower than anticipated and wells were not refilling fast enough, the Municipality had to quickly develop a new plan. At the time, there were no senior government infrastructure grant programs available and the Municipality borrowed some $6.85 million for this $6.95 million project.
Wastewater treatment is also expensive as soil conditions, temperatures and topography make wastewater treatment very challenging. For utility services, we now have just over $12 million of debt, mostly at favourable interest rates however, the interest rates will likely increase when in 2026, we renew some $7 million of debt that is presently set at an interest rate of less than 1%. We also have fire protection obligations, a new fire truck anticipated to cost about a $1 million in 2025 is needed to meet the Insurance Underwriters’ Standard. Insurance rates for everyone will increase dramatically if we do not meet these standards.
We are also anticipating expansion of the water and wastewater system to accommodate new growth. Construction costs continue to rise, therefore council will soon increase Development Cost Charges (DCC) on new development and new building permits to cover much of these off-site infrastructure costs. We are also applying for senior level government grants wherever possible and with a little luck, some of the future major capital costs may be reduced. Since 2018, the municipality has successfully obtained $6.59 million in grants for utility system improvements. However, most senior government infrastructure programs are oversubscribed and many municipal applications are not successful and realistically, we will not be successful with every application.
Some good news, we recently received approval for a $4.58 million dollar grant for the new water line to connect the alpine reservoir to the valley water storage reservoirs. This should cover some 73% of the anticipated costs. Existing DCC reserve accounts will fund 18% of the project, with the remaining 9% being funded from Municipal reserves. We will not have to borrow for this project. Engineering will begin this summer.
Great news, in 2023, we received an unexpected provincial Growing Communities grant for $1.15 million dollars. For new capital projects, we received good support; the daycare (nearly $2 million dollars provincial grant), upgrades to the Sun Peaks Centre (using provincial Resort Municipality Initiative funding), as well as provincial emergency management funding to cover our debris flow costs that impacted the wastewater treatment operation last Fall. With the Growing Communities grant, we received senior government funding of more than $5 million dollars in 2023, far more than in most years and very timely.
Water and sewer infrastructure and road repairs remains our priority. Affordable non-market employee housing is the new challenge and council will develop a plan this year. Affordable housing is not possible without subsidy financing from senior governments, Sun Peaks businesses, Sun Peaks Resort LLP, Tourism Sun Peaks, Developers, and the Municipality. Affordable non-market housing will require full community support.
From guest and resident feedback, we receive many favourable remarks about our vibrant community spirit. We have achieved many remarkable goals in the last 15 years. As Mayor, I have always believed that to be a great resort, we must be a great community! Council believes that this budget will meet this objective and address the current inflationary and interest rate challenges.