Municipal council unanimously approved the second reading of a bylaw that could increase property taxes this year after it was revealed the municipality could face a $50,000 budget shortfall.
Known as a tax over levy, the proposed bylaw could increase property taxes by about $14 for a residential property assessed at $750,000.
For a commercial property assessed at $1 million the tax over levy will increase property taxes by about $96 this year.
The issue was first brought up last week after Natasha Malenchak, the director of finance, told council four commercial properties had recently appealed their tax assessment.
According to Malenchak, the four commercial properties were collectively assessed聽at over $45 million and are appealing $4.1 million of the assessed values of their property, which takes into account聽how much each business earns.聽聽If the appeals are successful the town could face a $50,000 shortfall in lost tax revenue.
She described the bylaw as preparation for a 鈥渨orst-case scenario鈥� in which all four properties win their appeal leaving the municipality on the hook for $50,000.
To remedy the situation she presented council with two options, May 17, in the form of a single bylaw.
The first option she presented would not alter the 4.55 per cent property tax increase approved in May, but would force the municipality to find other ways to fill the budget shortfall, such as cutting services.
The second option she presented, included a small increase to the mill rate, which affects property taxes, to cover the potential revenue loss. With this option, any money that is not used to cover the shortfall would be used to off set taxes next year.
For example, if only two of the four appeals prove successful any left over money would be used to offset next year鈥檚 property tax increase.
Council unanimously approved the second reading of the second option, during a special council meeting May 24. It will now go to Parks Canada for consideration before it returns to council for a third and final reading.
Adding haste to the situation council must make a decision before June 15 because tax assessments must be legally sent out 30 days before they鈥檙e due, which is July 15.
鈥淚鈥檓 going to support this because I think it鈥檚 prudent to be proactive and I鈥檓 supporting it simply because I know the entire amount that we may over levy will go to offset a future budget,鈥� said Coun. Gilbert Wall.
Prior to the special meeting, council held a committee-of-the-whole meeting to discuss the bylaw as well as the tax split between commercial and residential properties. Currently commercial properties pay 5.1 times the amount in municipal taxes compared to residential properties. Council agreed to discuss the issue at a later date.
