Homeowners in Port Moody are facing a significant tax increase for the second year running.
City staff presented a draft of the budget to council on Dec. 5, which proposes a 8.13 percent residential property tax hike in 2024. This follows a 9.29 percent increase approved for 2023.
“There is going to be, naturally, people in the community that are upset about increases,” said Coun. Callan Morrison. “We can cut back on it, but we’re not providing that experience that people come to expect.”
Staff estimated the cost impact per average residential property (valued at $1.2 million), will be $307 including utility fees, bringing average annual property charges up to $4,568.
The report stated the city is facing “unique challenges” this year, adding that many other municipalities are facing similar financial pressures. The total city budget is increasing 10.09 percent, or by around $5.4 million.
One of the many challenges is inflation, which ranged between 5.5 and 7 percent for the first seven months of 2023.
Consequences from the rising prices have affected everything from the cost to transportation, to insurance, construction, contractor and hired services, and software maintenance, according to the report.
An added cost impact relates to negotiations with unions representing city employees, as wage expectations have risen and two collective agreements expired in 2021 and 2022.
Overhead prices are also increasing related to pensions, employment insurance, WorkSafeBC premiums, and extended health benefits.
Increases to salaries, wages, and benefits total $1.8 million, and represent 3.46 percent of the total budget increase.
Total operating expenses for the city and Port Moody Police Department (PMPD) are slated to increase by $3.9 million, accounting for 1.79 and 1.8 percent of the budget increase, respectively.
Paul Rockwood, the city’s manager of finance noted 73 percent of city revenues come from property taxes, and around 60 percent is spent on salaries and wages.
He said charts of consumer price and construction indexes have both risen significantly.
“There’s an increased cost of doing business. Materials, insurance, fuel are all increasing,” Rockwood said. “The budget is trying to respond to those accordingly.”
Rockwood also noted the city is still reeling from significant revenue losses related to mill closures and thermal plant shutdowns.
The report said local governments are having to absorb costs from the federal and provincial governments, which are downloading responsibilities onto municipalities.
Declining support related to emission reductions, affordable housing, childcare, mental health, and homelessness were all cited as examples.
Another challenge is the frequency and intensity of extreme weather events like atmospheric rivers, heat domes, as well as the pandemic, which all have stretched municipal resources.
Although Port Moody has emerged as a regional destination in the Lower Mainland, its popularity with visitors is straining the city’s ability to manage its growth and transportation demand.
The report described an “unlevel regional playing field,” as the city does not have casinos, pay parking, or development revenue to help it keep pace with the pressures on its services.
Port Moody is essentially encouraging growth of nearby cities like Burnaby and Coquitlam, while simultaneously trying to match their service levels, according to the report.
Staff said the goal of the budget was to maintain the 2023 service levels, but several new funding items were needed to address operational requirements and directions from council.
While revenues from development, permits, grants, as well as permit and user fees, increased $1.6 million in 2023, most of that money ($856,000) will be used to bolster the city’s reserves.
Other significant reserve transfers include $532,000 being banked to replace critical infrastructure assets, and another $532,000 for the Climate Action Implementation Reserve.
Coun. Samantha Agtarap said she appreciated the city’s approach to asset management, noting the city is in better shape than many other municipalities when it comes to infrastructure.
She referenced poor infrastructure management practices in the Town of Osoyoos, which have forced the city to increase property taxes by 37 percent in 2024, water fees by 146 percent, and sewer fees by 117 percent.
The city is proposing $637,000 for new staff positions they say are required to meet service demands, which account 1.2 percent of the 2024 budget increase.
Positions for Port Moody Fire Rescue Service and the PMPD represent the majority of these costs: $273,000 for the implementation of the Fire Rescue Master Plan, and $204,000 for a new police training sergeant.
Other hires include a new public arts coordinator for $86,000, and $73,000 for a financial clerk, labour for invasive species removal, and a parks caretaker.
An additional $401,000 is being used to fund positions phased in from 2023.
Coun. Amy Lubik said the city does not make new hires lightly, noting they need to pay their staff fairly if they want to retain them long-term.
“It costs us a lot of money to lose those staff,” Lubik said.
Morrison agreed, stating that staff retention makes the city more efficient, and turnover and retraining costs hamper how many projects the city is able to complete.
New operating expenses for the city total $837,000 for 2024, which account for 1.57 percent of the budget’s increase.
Most of that cash is being saved to fund the city’s Climate Action Plan, which anticipates nearly $5.9 million in spending by 2030.
Other big operating expenses include the restart of the Car Free Day event ($124,000) and funding for the Mayor’s Art and Business Task Force ($75,000).
Coun. Diana Dilworth said council has received emails suggesting they cut Car Free Day, National Indigenous Peoples Day (budgeted for $10,000), or the hiring of a public arts coordinator.
She responded that council is “highly committed” to providing more free events, Truth and Reconciliation, and expanding their City of the Arts branding in its strategic plan.
The official budget needs to be approved by May 15, and public consultations will run from Jan. 8 to 29.
Patrick Penner, Local Journalism Initiative Reporter, Tri-Cities Dispatch