Vernon council reduces proposed property tax increase

City reduces tax increase

Vernon city council voted to give its citizens a bit of tax relief for 2021.

In an extensive discussion, council decided to press pause on the 1.9 per cent infrastructure levy in order to ease the financial burden on the city's residents during this difficult economic time. The levy was implemented in 2012 as a 10-year cumulative tax that provides funding for city infrastructure projects.

City staff had initially recommended council to keep the levy in the proposed budget, which would have resulted in a 4.47 per cent tax increase for the taxpayer next year. Now that the levy has been paused, along with some minor tweaks to the overall budget, the overall 2021 tax increase is now projected to go up by approximately 2.55 per cent, saving the average household approximately $30.

Coun. Scott Anderson was the first official to suggest pausing the levy – his motion recommended that the levy increase, which equates to $820,000, be taken out of the FortisBC Legacy Fund.

The legacy fund contains $12.6 million, which was a one-time deposit from FortisBC for nearly the whole amount, with only $500,000 that was not contributed by FortisBC into the fund. The legacy fund is intended to provide money needed for emergency repairs or future projects.

Anderson's motion was defeated, but only because Coun. Brian Quiring brought up a different solution that Anderson and the other councillors were on board with.

Quiring's motion had the same core as Anderson's, but with a slight difference. His proposal was to pause the tax levy entirely for 2021, and extend the levy program an extra year to 2023, with no money leaving any reserve funds.

"We’ve talked about this in years past and never done it, and this year we are facing the biggest financial hurdle we’ve ever had, so now we have to do it," said Quiring. "Do we want to do it? No. Do we have to do it? Yes we do."

Since that levy would be bringing in an extra $820,000 that city staff had already factored into the proposed budget, some projects had to be reduced or postponed in order to meet the 2021 tax target. City staff worked very quickly and produced a solution in a matter of hours.

Proposed budgets for three upcoming projects will be modified once city staff finalize which projects will be affected.

Council unanimously voted for the proposal, but it is not final yet as there is still one more public input budget session, which is set for 11:30 a.m. Tuesday morning at city hall.

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