The owner of an average home in Mount Pearl will pay about an extra $75 a year in property tax next year, according to the city’s 2013 budget released Tuesday.
“While inflationary pressures result in increased costs for many of our daily operations, we have lowered our mill rates to help offset the assessment increases being faced by the residents and businesses of our fine city, which makes living in Mount Pearl not only desirable but also more affordable,” Deputy Mayor Jim Locke, chairman of the corporate services committee, said during the budget speech.
He said with most homeowners facing a 45 per cent increase in the assessed value of their properties council had to find a happy medium between providing services to residents and a reasonable tax rate.
“When the assessments came out my phone nearly melted because everyone thought it was a 45 per cent increase in their taxes so I tried to explain it was the value of the house not the taxes, but if we had to have kept the mill rate at 9.2 we would have brought in up to an extra $10 million and people would have paid a lot more in taxes,” Locke said following the meeting.
Council has managed to balance its budget by dropping the residential mill rate to 6.7, shaving off .5 mills from the previous 12.5 commercial property tax rate and keeping the rates for water and wastewater at the 2012 level — $600 a year per residence.
Locke said what the new mill rate boils down to for homeowners is if someone owns a house valued at around $220,000 with an increased assessed value at 45 per cent they’ll see an increase of $75 a year or just over $6 a month.
“This is truly a balance between continued investment in providing the highest level of service possible to our residents and businesses and ensuring we maintain fiscal responsibility and truly delivering value for every tax dollar paid by our residents and business owners,” he told council.
After determining the operating costs of running the city, he said the budget rings in at $41,511,000.
Locke said when council began the budgeting process, the wish list for projects topped $35 million for equipment needs and capital works projects.
But he said after many hours of picking through the wants and needs of the city, in order to avoid increasing its debt load, council settled on a $10.6-million expenditure on capital works projects.
He explained after the meeting this doesn’t include funding for the recreation multiplex of which council will have to borrow $15.75 million.
But he said even after borrowing that money the city’s debt ratio will remain at a 6.5 per cent debt ratio, which means for every dollar that comes in, the city has to pay 6 1/2 cents out to the debt.
“And that’s an envy for a lot of communities. What we decided to do as a council rather than burden future generations with the debt is we pay as we go. We want to enhance the service, but we don’t want to pile on all this big debt. So we were cognizant with this multiplex we were going to have to borrow $15.75 million, but that will be financed over a number of years.”
During his speech to council, Locke said two areas of spending in which the city has little control over is the cost of regional services and wages and related mandatory payroll costs.
He said 21 per cent of the budget, or $8.6 million, is spent on fire protection, purchase of water, public transit, wastewater treatment and waste management.
“These costs have increased more than $1 million over the past year and once again the city is committed to paying our fair share of this regional burden,” he said.
On top of that, 33 per cent, or $13.8 million, is spent on payroll costs Locke said and like all municipalities it is an area where the costs continue to rise.
Building and replacing infrastructure takes big money, he said, but council has control over how much is spent on what projects.
“Council can choose between conflicting priorities, but nevertheless, the demands placed upon the city to address the infamous infrastructure deficit facing all municipalities across the country are high,” Locke said.
During his presentation, the deputy mayor said street upgrading and improvements, along with enhancements to outdoor recreation facilties, will continue as well as the construction of a minor baseball field and a new dog park in the Powers Pond area.
“We are also very proud to announce the beginning of a significant investment in the revitalization of the Donovan’s Business Park. Our business community has spoken through the Mount Pearl-Paradise Chamber of Commerce and has indicated that investment in roads and infrastructure is one of their key priorities,” he said.
Locke said council is committed to developing and implementing a multi-year plan to improve infrastructure in the park, which is home to about 400 businesses and employs about 6,200 people.
He said the start of the project will get underway in 2013.
Locke said council met with the chamber before the meeting and members were supportive of the budget.
Deborah Feltham president of the Mount Pearl-Paradise Chamber of Commerce was in attendance for the budget speech and said the organization would issue a statement on the budget today.