Warman homeowners and businesses will have to dig a little deeper to pay their tax bill next year.
Warman City Council adopted the city’s 2024 operating and capital budget at a meeting on Monday, November 27. The budget includes a 5% increase in revenue generated from the municipal portion of property taxes.
The projected increase does not include the education portion of property taxes, which is collected by the city on behalf of the province. The municipal portion accounts for 64% of the property tax bill, while the education portion is 36%.
While the 5% hike in municipal property tax revenue is significant, Warman Mayor Gary Philipchuk says it’s unavoidable. He points out that over the past couple of years the rate of inflation has gone up 11.5%, resulting in higher capital and operating expenses for the city.
Philipchuk said the increase in tax revenue is needed in order to maintain and improve civic services and infrastructure.
“It’s a balancing act,” said Philipchuk. “Nobody wants to see a tax increase, but the reality is that the city needs to increase property taxes in order to keep up with growth and to ensure we have the amenities for a good quality of life for residents. The increase is higher than we’ve seen in the past, but it’s still well below the rate of inflation.”
A draft budget presented at the October 16 city council meeting initially proposed a 9% increase in property tax revenue. At that meeting, councillors unanimously decided that increase was too high, and set out to find ways to bring that number down.
During a special meeting of Warman City Council on November 13, councillors and city administrators went over the proposed budget line by line. A proposed increase in the base tax of $69 to go toward a new RCMP building was removed from the draft budget, which lowered the proposed tax increase from 9% to 6%.
Several other proposed expenditures, including improvements to Thompson Road South, were also axed from the draft budget. Those changes resulted in overall savings of $109,000, which lowered the tax hike to 5%.
The 5% increase in municipal tax revenue translates into an additional $115 per year ($9.58 per month) for an average residential home in Warman with an assessed value of $350,000 and an average 2023 municipal tax bill of $2,306, according to figures provided by the city’s finance department.
The 5% increase in tax revenue includes a new recreational capital levy of $75 per property in 2024. (The recreational capital levy will rise to $150 per property in 2025 and subsequent years.)
The recreation capital levy is directly tied to funding recreational facilities. The immediate priority is the expansion of the Warman Home Centre Communiplex (WHCC) to include a second ice surface; but in future the recreation levy would be allocated to other priority projects. Construction of the expansion to the WHCC is slated to begin in 2024.
The overall 2024 civic budget projects overall revenues of $26,752,701 and operating expenditures of $18,818,727. Additionally, a total of $9,063,000 in capital purchases have been included in the 2024 budget.
The $7,933,974 surplus in the budget will be transferred to reserves to support capital purchases, according to Warman Director of Finance Amanda Rosenthal-Hiebert.
Recreation and culture expenses account for 22% of the city’s annual tax allocation, with transportation services, protective services and general government all taking a 10% share of the overall expenses. Environmental health and wellness expenses receive 6% of the tax allocation, with planning and economic development’s share pegged at 4%.
The largest portion (38%) of the city’s 2024 tax allocation is for capital transfers.
The 2024 budget’s capital transfers also cover cost overruns for two capital projects that were part of last year’s budget. Both the expansion of the city’s sewage lagoon and the replacement of Lift Station Number 3 went over-budget due to unforeseen circumstances and inflation, and the additional costs were reallocated to this year’s budget.
The number of residential and commercial property owners enrolled in the city’s TIPPS program is growing every year, according to Rosenthal-Hiebert. She said the program provides a good way for ratepayers to spread out their annual tax bill into equal monthly installments.
While the budget passed at the November 27 meeting sets the overall amount of revenue required from municipal property taxes, the actual amount of tax that individual property owners will pay is determined by the mill rate and the assessed value of the property. The city’s mill rate is set by council in the spring, after the provincial budget is tabled and the provincial education mill rate is set.