Colwood needs to more than double its spending to maintain its roads, sewers, buildings, vehicles and parks and trails, senior staff say.
They are recommending a one per cent increase on tax bills (about $15 to $20 a year for the average residence) in each of the next 12 years to cover a funding gap in long-term infrastructure replacement.
The sustainable infastructure-replacement plan is to be presented to councillors Monday.
“No one is ever a fan of tax increases and I get that, but I also think our residents understand sometimes short-term pain [is necessary],” said Mayor Rob Martin.
“I don’t think $20 a year is going to make or break anybody in our community. But to know that money is going toward a long-term vision, I think our community is quite supportive of it.”
The increase would come on top of other budget stressors, such as inflation and new health-care costs, but is necessary for the long-term financial health of the municipality, Martin said.
Chris Paine, Colwood’s director of finance, said the tax increases benefit taxpayers in the long run.
“These proposed tax increases will help ensure an additional $51 million in investment revenue is earned over the 50-year period, as opposed to an additional $35 million in interest expense” if the money had to be borrowed, he said.
“So it is short-term tax increases overall, but the impact to the taxpayer is actually beneficial.”
Colwood spends about $2 million a year to maintain $370 million in assets, including 91 kilometres of roads, 92 hectares of land, 49 kilometres of sewer, 39 kilometres of drainage, 60,000 square feet of buildings, and vehicles and equipment. That has to be increased to $4.8 million, the report says.
“The city can expect to spend approximately $425 million in the next 50 years to replace existing infrastructure,” the report says, noting that the estimate does not include spending forecasts related to growth, new development or new capital services. “At current funding levels the cumulative funding shortfall would grow to $190 million, forcing the city to incur debt and sharply increasing taxes.”
The report says the city can avoid sharp tax increases or spending cuts and can reach sustainable funding levels in 12 years by:
• Dedicating $900,000 in funding from a combination of investment returns, a new sewer levy, under-utilized road budget funds and surplus RCMP funds for infrastructure,
• Increasing taxes/utility rates by one per cent a year for the next 12 years for infrastructure replacement, and,
• Adopting new policy changes, such as using new construction tax revenue to offset infrastructure costs associated with that construction.
AMOUNT SPENT VERSUS AMOUNT NEEDED
|Amount spent||Amount needed|
|Drainage||$477,000||more than $1 million|
|Vehicles and equipment||$540,000||$643,000|