Ladysmith’s budget will be discussed at Feb. 20 council meeting

There will be more opportunities to ask questions about Ladysmith’s preliminary budget during the Feb. 20 council meeting.

The cost of operating the trolley compared to revenues was just one of the issues raised last week during the first of two Ladysmith council meetings dealing with the town’s proposed budget.

During last Monday’s council meeting, city manager Ruth Malli presented Ladysmith’s proposed budget for the 2012 general operating and capital funds.

Questions were raised by councillors and members of the public about a number of aspects of the proposed budget, including the trolley’s expenses compared to revenues, as well as its life expectancy.

The town believes the trolley’s life expectancy is 10 years, according to Mayor Rob Hutchins.

“My assumption was the trolley was a transition to BC Transit,” added Malli.

Coun. Gordon Horth asked for comparisons of Ladysmith’s trolley costs and the costs other communities are paying for transit.

Questions were also raised about the interest rate for purchasing a new fire rescue vehicle, funding for the Ladysmith and District Historical Society, an increase to the trails budget which is related to increased safety considerations, and about the benefit costs for union and exempt staff.

The preliminary budget is available on the town’s website, and there is a comment sheet so that people can make submissions to the finance department, which is new this year.

The preliminary budget does not include any exact numbers regarding tax impacts on property owners because it is too early.

“Until the year-end is completed and we have information on new growth and until council has finished its strategic plan, we won’t have a bottom-line figure as to what the impact is going to be on the individual taxpayer, but this is the start of the process,” explained Malli.

At this particular time, the general tax increase is proposed at 5.39 per cent.

“That is a very preliminary figure, which contains those items on which decisions have already been made,” said Malli.

Hutchins asked staff to also look at what a two-per-cent increase would look like and how that would impact the proposed budget, as that is how it has traditionally been done.

Service levels for 2012 are proposed to stay the same.

“Service levels have not been cut back,” said Malli. “There are some examples of things where there are some increased service levels, where we’ve heard indications from council that there is a desire to fund these service levels.”

The town’s preliminary budget identifies priorities and challenges for the coming year.

Upgrading the town’s waste water treatment plant is considered a priority. Over the last number of years, Ladysmith has invested in upgrading the plant from primary to secondary treatment, and another phase is now required. It is proposed that this upgrade will cost $16.9 million, making it the largest project in Ladysmith’s history, according to staff.

One of the challenges identified is the town’s reliance on Western Forest Products (WFP).

The town has taken steps to systematically reduce Ladysmith’s reliance on this class by one per cent per year.

Major industry has dropped from 33 per cent of the total levy to 14.9 per cent in 2011. This reduction has resulted in a shifting of taxation from major industry to the other classes, and council has used reserve funds to offset this shifting and reduce the impact on other classes. This reserve is anticipated to be fully depleted by 2017.

“Hats off to the councils that thought about decreasing our reliance on the industrial tax base, given the situation some other communities are finding themselves in now,” said Coun. Steve Arnett. “I think that’s been a great move.”

There will be more opportunities to ask questions about Ladysmith’s preliminary budget during the Feb. 20 council meeting.

The 2011 year end closes in March, and the 2011 Financial Statements will be calculated. Revised assessment data will be available in April, and the town will begin property tax calculations. Ladysmith’s budget bylaw and tax rates bylaw must be approved by May 15.