The town of Sackville will be looking at both increased costs and increased revenues for its 2022 budget.
At a meeting Monday, councillors heard a presentation from special projects manager Kieran Miller and town treasurer Michael Beal outlining the priorities and expected realities for the upcoming year. Monday’s presentation and ensuing discussion replaced the closed meeting held in the past, where senior managers and councillors discussed budget priorities in a less formal, but private meeting.
Miller reviewed the priorities of the past year, including highlights from 2021. Beal presented the expected financial picture for the town, which he said still depends on a few factors.
RCMP PAY BUMP COULD COST AN EXTRA $200K PER YEAR
One of the biggest increases will come in policing, due to a long awaited union contract for RCMP officers across Canada. The National Federation of Police signed a first-ever collective agreement with the federal government in August. The new contract is retroactive, starting with a pay increase in 2017. The cumulative increase for 2022 is just shy of 19%.
For a constable in the RCMP, that’s a $20,000 increase in annual salary, from a maximum of about $86,110 in 2016, to about $106,0576 in 2022. For a sergeant, it’s an increase of about $24,000, from a maximum salary of about $102,775 in 2016, to $127,204 in 2022.
Beal says he expects the cost to the town to be in the neighbourhood of $200,000 for 2022. “That would require a two to three percent increase in tax base alone, just to sustain that,” he told council Monday.
That projected $200,000 increase doesn’t include backpay for the retroactive contract, which will need to be paid off by the municipality. Beal says he is still waiting on that number, but hopes to have clarity soon. In a previous meeting, Beal said the backpay could be covered by a surplus in the 2021 budget, the town’s operating reserve (which is made up of past surpluses), and/or an allocation in upcoming 2022 budget.
OTHER COST INCREASES ON THE HORIZON
There’s another contract negotiation on the horizon for Sackville. The town will soon start talks with CUPE Local 1188, which represents town employees, to renew a collective agreement that expires in December of this year. The results of that negotiation will likely not be known before the 2022 budget is finalized.
Insurance costs are also going up by 10 to 15%, Beal told council. That could cost Sackville between $25,000 and $40,000 per year. Some municipalities are seeing increases of twice that, says Beal. “We’ve been told we do good risk management Sackville,” he told council. “We monitor claims, we temper expectations, and our claims have not been significant.”
Council has also opted to try out a recreation subsidy program this year, using $65,000 allocated to council initiatives from 2021. If the pilot succeeds, that program will become part of future budgets.
And then there’s the budget requests that came in from residents and local groups at this year’s public budget priorities meeting on September 20.
Many of the presentations were from groups seeking renewed funding under the Community Grants program, but some were outside that scope, such as a request for the town to implement street calming and active transportation infrastructure.
Deputy Mayor Andrew Black threw his own ideas into the mix on Monday night, with a suggestion for the town to tackle the problem of Japanese knotweed in the waterfowl park. Knotweed is a particularly aggressive invasive plant, and Black suggested the town set aside some resources to deal with it now, rather than letting the problem grow.
Black also suggested council reconsider possible ways to help local businesses who are suffering after 19 months of the pandemic. The idea of town relief for businesses came up early on in the pandemic, but was not pursued by town staff or council.
Councillor Sabine Dietz agreed that town support for local businesses would be necessary, and also asked where bike lanes should figure in the town’s financial plans. Beal told council that bike lanes would be part of a public works regular budget, and not necessarily a special project.
INCREASED PROPERTY ASSESSMENTS MEANS TAX RATE WILL LIKELY STAY AS IS
Though the stated goal for this year’s budget is to keep the tax rate as is, that doesn’t mean taxes paid won’t be going up. When assessed values of properties go up, people pay more property tax even if rates remain flat. “With the assessment increases, we sort of skirted around not having to raise taxes this year,” said Dietz on Monday. “So it’s basically we as community avoided it because the province is doing it for us.”
Sackvillians have been receiving good or bad news in their mailboxes this week as the year’s property assessments from Service New Brunswick arrive with increases reflecting the active real estate market in the province since the pandemic began.
Service New Brunswick says the average increase in assessments across the province this year is 7.7%, but that is not across the board. Some properties, such as some Mount Allison University properties mentioned by Beal at Monday’s meeting, are seeing assessment increases of between one and two percent. The Students’ Union Building, where CHMA is located, is looking at a 1.7% increase in assessed value, as is the main Mt A campus bordered by York, Main, and Salem.
Service New Brunswick has come under criticism in the past for low assessments on certain corporate properties. The new 11-storey building housing Irving headquarters in Saint John was assessed at $56.8 million for the 2020 tax year, despite the fact that its estimated construction cost was closer to $88 million. And for both 2021 and 2022, the assessed property value has remained the same on the Irving HQ.
There are other properties in the province that will have no increase in their assessment. Beal said Monday that 28% of properties in the province have no increase to assessed value. Another quarter have an increase up to 5%, and 23% have an increase between 5% and 10%. About 19% are facing an increase over 10%, he said.
Service New Brunswick does have a spike protection mechanism for most owner-occupied properties with an assessment increase over 10 per cent. However, this does not apply to new construction, properties that have been sold in the previous year, or those that have undergone major improvements.
BEAL EXPECTING 3-4% AVERAGE INCREASE IN SACKVILLE
It’s still not clear how an average increase in property assessments will affect the town’s revenue from property taxes, but Beal said he is expecting, and hoping for, a 3-4% increase, more than the roughly 1% increases seen in recent years.
“If we can sustain a three to four percent increase, then we should be okay, moving forward in 2022,” said Beal.
