St. John's to hike residential tax rate, but many residents will hardly notice

As anticipated the City of St. John's is projecting a rise in spending, and while the city's mill rate and water tax are both increasing, most residents will only feel a modest pinch.

One third of the population will not see an increase or will see their taxes drop, according to projected numbers released in a three-year budget plan on Monday.

Meanwhile, 79 per cent will pay $10 or less extra per month.

Some residents will have to pay more than $25 per month extra.

The financial document — which also earmarks more money for clearing snow from city sidewalks — council announced a 0.4 increase to the residential mill rate to offset a general decrease in property tax assessments.

The mill rate will now be set at 7.7.

Water taxes will also jump $25, from $580 to $605 next year.

Commercial mill rates will also rise to 26.1, an increase of 1.4 in 2018. It had dropped in the 2017 budget.

"We acknowledge that, for some, any increase in property tax will be a burden and we pledge to work with you to the best of our ability to ease that burden," Coun. Dave Lane said in his budget speech.

The city has not projected any cuts to services.

All council members, with the exception of Debbie Hanlon who was not present due to a death in the family, voted in favour of the 2019-2021 budget.

What's driving costs?

Heading into the budget, the city was dealing with a $12-million shortfall.

The key forces behind the spending increase are a new community centre, higher electricity rates, debt payments, payroll hikes and an already announced heftier grant for St. John's Sports and Entertainment.

The city expects to pay an extra $3.3 million in debt servicing payments to cover the city's share of cost-shared capital works projects — one of which is the Kenmount Terrace Community Centre.

The increase in debt servicing payments brings the total to $37.7 million for next year.

New staff needed for the Kenmount Terrace Community Centre project is contributing to a hike in payroll costs.

Payroll costs will increase by $3 million next year, the city projects.

Contributing to that figure is an increase for certain managers as part of their contracts.

As well, employees at the St. John's Regional Fire Department and Metrobus will receive previously negotiated pay raises.

Salaries for mayors and councillors increased by 2.3 per cent, but the city said the change in the budget merely reflects a more accurate amount spent on travel for members of council.

A climate change position will also be created at about a base salary of $125,000 per year to outline the city's environmental future.

As the city braces for higher light bills, a projected $696,000 more has been earmarked to cover the increase.

The city spends the majority of its dollars on "environment health," including garbage collection and water and sewer, followed by transportation services.

"Through all of this, the city will work aggressively to find ways to operate more efficiently," Lane said.

"Council is committed to keeping our human resources costs under control, to aggressively address the problem of rising power rates, and to focus on stability through partnerships with community and government organizations."

Money for Kenmount Terrace community, sidewalk clearing

Despite the shortfall, Lane's budget speech touted new projects and funds funnelled into recreation and snow clearing.

An extra $150,000 has been earmarked to improve sidewalk snow clearing.

And Lane said work will begin next year on the long-awaited Kenmount Terrace Community Centre.

Council has also decided to waive development fees where developers present a plan for an area the city would like to see enhanced.

Those areas are spread across the city and have been identified as having potential for future redevelopment, with a mix of commercial and residential uses.

Neighbourhoods in the east and west ends, as well as the downtown and Mundy Pond areas, have been identified as locations in need of a development boost.

"We must also begin to measure the price of sprawl and consider better aligning development fees with the impact that projects can have on the surrounding community," Lane said.

The St. John's Board of Trade, meanwhile, is expressing its disappointment with the budget and its hike for commercial building owners.

Chair Andrea Stack said the increase will unfairly place a financial burden on business owners.

Other savings

New contracts for snow clearing and ice control in some city parking lots has resulted in $285,000 in savings.

Eliminating staff car allowances saved $295,000 from the city's bottom line. The city said some managers, particularly in public works, received a sum to cover their transportation.

Changing from Bell to Telus resulted in saving $150,000, the city said.