Quesnel Facing Budget Crunch
By 250 News
Tuesday, January 26, 2010 09:38 AM
Quesnel, B.C.- The City of Quesnel is looking at cutting programs, people and community support items in an effort to reduce its tax pressures.
Quesnel Council has provided staff with direction to present an initial budget representing an average tax increase of between 2.4% and 3%. This will require cutting close to $1 million from the operating and capital budgets.
Quesnel is facing a significant loss of its industrial assessment base combined with very little new construction. In 2009, Northstar Lumber applied for a partial shutdown allowance, which reduced its assessment by $6.49 million, resulting in lost municipal taxes of approximately $335,000. Another industrial site has appealed its assessment.
To be fiscally prudent, the City is placing extra funds into the Tax Stabilization Reserve based upon the estimated effect of this appeal. Finally, due to frozen property assessments last year, the City must account for two years worth of depreciation on its industrial assessment base (about $500,000 in lost revenues based on 2009 rates).
In addition, the West Quesnel Land Stability program requires about $250,000 per year for five years. This is the City's contribution to match a $3.14 million grant received. These types of additional funding pressures, plus regular cost increases would equal an 11% tax increase.
In order to reduce the tax increase, the City must look at cutting programs, people and community support items. Council Staff will present this budget at the first Quesnel budget session on Feb. 1 at 2 p.m.
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