Wednesday, May 23, 2012

City of Victoria Tax Increases

While it is nice to see the City of Victoria do what it can to keep property tax increases low for the next few years, I am concerned about this quick shift in thinking by the council.

I have been concerned about the speed with which the taxes and other fees have been rising in the City of Victoria but I am also very concerned about the sustainability of the City finances and I am not convinced that capping the increases for the next few years now is the right way to go about it.

The City of Victoria did not end up where it is now overnight, it has been a long term growing problem for at least a decade or more Dean Fortin just has the misfortune of being mayor when the problems are beginning to become very serious.   The council is now looking for how to deal with the shortfall that their capping of tax increases will cause.

I am hoping that the City of Victoria council and staff will question everything and consider all the potential options for reducing the costs of the City.   In many ways I think that one big cut would be the best way to achieve the goals than thousands of small cuts.  The City has had an increasing communications budget, in February the budget plan called for a 10.13% increase in this department, a total $60,167.  Given the quality of the communications coming out of the City, one has to wonder if this is money well spent.   Honestly I am not sure why any government needs to spend much money on communications at all.  There is a local media that will cover what the City is doing and the line staff are very capable of speaking about what they are working on.   The glossy newsletters and brochures the City sends out I doubt are read by more than a few percent of the population.

To keep the property tax increase to only 3.25% next year, the City needs to find savings in the range of $5,000,000 over the next few years with most of that coming sooner rather than later.    The City also needs to figure out how to stop other costs from rising.

In the latest budget I can access the City does have one area that is set at zero and I think is not that low - the assumption is that there are no new assessment revenues.   This may be the case but it seems odd to me unless all the existing properties that are being redeveloped do not count as new assessment revenues.   I do not have the access to the data to know how much the total assessed value of City rose last year and how much it is likely to rise in the coming years.   As an example, the redevelopment of Hillside should bring in a good chunk of change to the City.

My biggest financial concern about the City of Victoria is how well prepared  it is for all the capital projects that are coming.   As much as it will cost us money, I think the City should have raised property taxes more dedicated most of it to capital reserves.    The City is facing a huge slew of unfunded projects and needs to build the reserves up to make it possible to do the projects as they arise but to also have a large enough reserve in the future that City will no longer have unfunded infrastructure projects again.   I do not know how much should be put aside, but I suspect it is significantly more than is being set aside now.

I wish the City had more detailed financial statements for past years online.   Without them it is hard for me to make the sort of detailed commentary and analysis I would like to.  I know there are some details in the annual reports of the City, but the audit in there is not the same sort of detail as there is in the budget and so it is impossible to compare two.
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