Budget 2015: pain for gain?

Mayor counting on 6% tax hike to set the table for future infrastructure savings

It’s not the news Aaron Stone necessarily wanted to deliver in his first budget as mayor of Ladysmith.

But it is the budget he thinks Ladysmith needs.

Council is expected to give final approval tonight to a budget calling for a 6.29% hike in residential taxes — the equivalent of a $92.58 increase in the bill to the average home.

According to Stone, the hike may be higher than what most residents may have wanted, but it lays the necessary groundwork  to replace deteriorating infrastructure in the most efficient manner possible down the road.

In other words, short-term pain for long-term gain.

“I can’t predict the future, but that is the goal,” he said. “By making investments now we will improve efficiency and cut long-term costs. With a plan in place, now we aren’t going to fall further behind.”

Two key elements to the plan — and major reasons for the hike — are a commitment to putting more funds into capital reserves and building up the town’s information technology infrastructure.

Stone believes those two investments should not only combine to give staff the tools needed to move ahead on expensive capital projects like water system improvements and a new fire hall, it will also put them in a better position to chase senior government grants that could significantly reduce the direct cost to the Ladysmith homeowner.

“Notice has been put out to municipalities that they need to put together a solid asset management plan,” he said. “I think we’ve taken a progressive approach. I think we will be in a better position than other communities moving forward.”

Staff had originally proposed a budget calling for an 8% hike in the residential tax rate and 4% hike in the commercial rate. They ended up whittling  the residential rate down through a variety of changes. The most significant was pulling $100,000 from a capital reserve fund to pay debt servicing for First Avenue that is scheduled to permanently come off the books next year.

Council also agreed to shift more of the burden on to commercial and industrial taxpayers that had been originally proposed — hikes of $50,000 and $25,000 respectively from last year, shared over each ratepayer group.

Stone said the Town needs to continue to monitor each sector to make sure the burden is divided in a way that is in the best interest of the entire community.

Another policy moving forward is making sure water and sewer rates and other town user fees better reflect the actual costs of those services, rather than being heavily subsidized by property taxes.

Stone said all this just sets the table with a plan. Now it is up to the Town to work hard and smart to provide results for the community.

“You get a sense of how important this is to me. There is a lot of pressure on staff and council to deliver,” he said.

“We have to see the fruits of this investment. We have to deliver and deliver well.”

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