Council will offset the increase in the City’s 2019 Operational Budget with accumulated surplus from the previous year’s budget, bringing the average increase in municipal taxes paid to zero per cent this year.
The residential tax rate is set at 8.0331, the multi-family residential rate is 8.4215 and the non-residential rate is 12.2760. These rates will generate just over $20.5 million from properties within the city, which will then be toped up with $555,381 from accumulated surplus to balance the city’s $52 million budget for 2019. This budget is inclusive of all municipal expenditures and transfers.
Accumulated surplus is the result of not spending money budgeted for the previous year – often in salaries not spent while positions are being filled, for instance. Higher than expected revenue from investments also helped contribute to the 2018 accumulated surplus.
“We know about many hardships in the community due to the economy and so council did not want to see an increase in taxes,” Mayor Craig Copeland said. “Using accumulated surplus means that the increase in taxes could be felt next year. We will either need additional revenue or we will have to look at reducing services in the City to balance the 2020 budget. These are difficult times and, if things do not turn around, we have some difficult decisions on the horizon.”
The tax rate is a factor used per $1,000 of property value to determine the amount of taxes a property is required to pay for municipal services. Taxes are based on the assessment, which means that a tax rate increase or decrease does not necessarily mean an increase or decrease in the amount of municipal tax a property owner will pay compared to previous years.
On average, assessments in the City of Cold Lake dropped by about six per cent. Owners whose assessments are in line with this average will pay the same amount of taxes as last year, while property owners who did not see as much of a drop will pay more. Those whose assessment dropped by more than the average will pay less than the previous year.
“We are still reeling from the $10 million in annual revenue lost from ID 349,” Mayor Craig Copeland said. “The effects of that loss are truly starting to be felt – especially in our capital budget – and without additional revenue, we will quickly find ourselves in an unsustainable position once again. People seem to forget that the original Cold Lake Air Weapons Range deal was brokered to achieve a sustainable Cold Lake. We should not be surprised that the dismantling of that deal is leading the city in this direction.”
Tax notices will be mailed by the end of the month with a June 30 due date.
The city’s capital and operational budgets are available online at www.coldlake.com. Information on historical tax rates and the municipal property taxes collected is in the city’s annual report, also available online.