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Victoria aims for 6% property tax increase instead of 6.9%

Council votes to save $1.5 million by delaying contributions to reserve funds.
Victoria City Hall at Douglas Street and Pandora Avenue. TIMES COLONIST

Victoria city council appears to have trimmed the city’s 2023 operations budget enough to reduce the expected tax increase for property owners to six per cent.

Council voted Thursday to save $1.5 million in spending by reducing this year’s contribution to the parking reserve fund by $500,000 and its contribution to the debt reduction reserve by $1 million, the effect of which would drop the expected tax rise this year to six per cent. The motion also called for council to restore the funds in next year’s budget.

The city’s $300-million draft budget had anticipated a 6.9 per cent tax hike for 2023, which would translate into a $251 increase in property taxes for an average household and a $646 increase for a typical business in the city just to maintain the current level of service.

Coun. Chris Coleman, who brought forward the motion to reduce the tax rise, said he did so regretfully.

“It’s ironic because I’ve fought for years to increase our reserves,” Coleman told council. “It’s our job to find some of the other opportunities that may assist the taxpayer. So this is a significant draw down on what we would be allocating, and it draws down the tax lift.”

The city’s parking reserve fund, used to upgrade parkades and parking equipment, ­currently has a balance of $20 million and this year the city was expected to add $3.55 million to it.

Parking facilities are expected to need about $6 million in upgrades in the next few years, while the cost to maintain and repair is estimated at between $25 million and $30 million in the next five years.

The debt reduction reserve, which finances internal borrowing for capital projects and pays down outstanding debt, has a balance of about $21.8 million. The budget called for a transfer of $3.1 million this year, which reflects the amount used to repay the internal borrowing to build the new Fire Station #1.

“I’ve been a bit of a hawk pushing more money into reserves, so this doesn’t bring me any joy,” said Coleman during Thursday’s debate. “But I think it is necessary that we actually take a serious look at this.”

Coun. Marg Gardiner was onside noting a little more money in the pockets of residents and businesses allows them some freedom with their spending.

“For some of our businesses that may mean enhanced security. And for some of our residents, it may mean going to a coffee shop, going out and buying more goods in our downtown and in our villages, or may mean more money to take their kids to a camp,” she said.

Coun. Stephen Hammond said the measures were “relatively harmless” and with everyone having to cut back these days it’s a signal that council understands and is trying to help.

There wasn’t unanimous support for the motion.

Councillors Matt Dell, Jeremy Caradonna and Dave Thompson all voted against reducing the tax increase by reducing the amount targeted for the two reserve funds.

“I think we need to be clear here that we’re making a massive mistake. In fact, we’re doing the opposite of what good financial responsibility looks like. What we should be doing as a community, what our convention is as a corporate entity, is inflation plus one,” Caradonna said, noting that would set the tax increase at about 7.9 per cent.

“I’m very hesitant to put aside our fiscal management of the future,” added Dell. “I know this tax hit isn’t going to be fine. I mean every single one of us is going to be paying it in one way or another. But I do think investing in the future of the city is important.”

Thompson said he was sympathetic but worried about maintaining the reserves and that there may not be the political will to replenish the fund in future years.

Council also passed motions Thursday to provide budget room for small projects, without having to increase the tax rate.

It has allocated $150,000 to activate the Victoria Music Strategy, $110,000 annually for the Greater Victoria Community Social Planning Council to support the Greater Victoria Rent Bank, and $50,000 to help fund a pilot project to mitigate the harm to housed and unhoused people living, or operating businesses, in and around outdoor sheltering.

Council also directed staff to implement paid on-street and parkade parking from 8 a.m. to 9 a.m. and 7 p.m. to 8 p.m. with all funds to be re-invested in downtown for beautification and maintenance, cultural opportunities, new parks and amenities. Extending the hours for paid parking could result in an estimated $700,000 in additional revenue.

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