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Au challenges tax policy

For the second time in just four weeks Richmond councillors debated the merits of an annual one per cent tax increase that is dedicated for a reserve account for infrastructure. Coun.

For the second time in just four weeks Richmond councillors debated the merits of an annual one per cent tax increase that is dedicated for a reserve account for infrastructure.

Coun. Chak Au made a presentation to council Monday proposing the city’s long-term financial policy of increasing property taxes by the rate of one per cent plus inflation should be amended.

During the hour-long council meeting Au stated it’s possible that growth in the housing market and efficiencies found in a spending review can fund the city’s infrastructure needs without having to raise taxes automatically, per the policy.

Au proposed that instead the city should transfer to reserves of “up to one per cent.” 

Au said the city is in good financial standing with net financial assets, as of 2013, of $549 million and ever-increasing casino revenues (a record $21 million in 2014).

Last month, council voted in favour of a one-time exception to the long-term policy and scrapped the one per cent increase, saving the average property owner about $20, and costing the city $1.8 million.

The tax increase was lowered from 2.98 per cent to 1.89 per cent. 

Financial planners noted civic costs have risen higher than the consumer price index; salaries rose by three per cent, fringe benefits by six per cent and electricity by seven per cent. Planners also noted that without the one per cent increase, the city would be $109 million short on its infrastructure reserves by 2024; that’s roughly the same cost of building a new pool, seniors centre and firehall at Minoru, as currently planned.

Councillors Ken Johnston and Carol Day joined Au in opposing the automatic one per cent increase.

Day said property owners are people “living on limited incomes” and wanted more time to review the policy.

“My objection is procedural,” said Johnston, who also wants a spending review.

Mayor Malcolm Brodie repeated his opinion that the reserves need to be funded.

He noted the budget, as it stands, maintains the same level of services as the year prior. 

Brodie said the choice is between cutting services and taxes now and paying for infrastructure later or maintaining a tax policy that looks toward the future.

Coun. Derek Dang supported the automatic increase, noting that casino revenues are not guaranteed and the city has done its best job in finding efficiencies.

Coun. Harold Steves noted that although Au’s point regarding housing growth brings in more tax revenue, there’s also a greater demand for services.

While one property may turn into five townhouses, “now you have five families needing services instead of one,” he said.

Steves noted that when Richmond cut taxes in the 1990s, it emptied its reserves, requiring the city to subsequently raise taxes by four to five per cent years later.

Give your opinion at LetsTalkRichmond.ca.

@WestcoastWood

gwood@richmond-news.com