Beneath people’s feet in the capital city lies a sewer system that was mostly built before 1920, storm drains that mainly predate the Great Depression and half of the water system that was constructed before the Beatles rose to fame.
Those aging municipal assets and budgetary decisions to deplete the reserve funds that pay for renewing the infrastructure are factors influencing a proposed 8.37-per-cent hike in property taxes for Victoria residents next year.
That tax increase translates to the average household paying $248 more in 2024 and a typical business seeing their municipal dues go up by $640.
The city said all programs and services are facing escalating costs from inflation, supply chain challenges and labour shortages, plus high construction costs that are expected to keep rising in the next three years.
Victoria’s draft financial plan includes an operating budget totalling $328.3 million, and looks to spend $82.6 million on capital projects. Funding the Victoria police department’s proposed budget would account for 2.40 of the 8.37-per-cent increase.
New spending next year would include an additional $250,000 to support Canada Day celebrations, along with creating ongoing funding streams for the city’s downtown bike valet and its music strategy.
Climate events have negatively impacted the condition of municipal infrastructure and the city said on Monday (Nov. 27) that’s caused the planned replacement of those assets to be expedited in some cases. Staff also said 30 years of underinvestment in road resurfacing was an example of infrastructure costs coming due in the coming years.
City reserves that pay for public assets like roads, underground infrastructure and retaining walls are stressed from council voting in 2020 to not raise property taxes in response to the pandemic. That decision resulted in reserve fund levels being almost $20 million lower today than what they would’ve been had annual contributions continued, staff said.
The city is proposing a new funding strategy where it would dedicate annual tax increases of three per cent – equalling $5 million each year – from 2025 to 2030 to adequately fund the replacement of aging city’s assets.
The 8.37-per-cent increase next year is contingent on Victoria raising more revenue by further increasing rates by 50 cents an hour in 90-minute parking zones and upping parking fines. The city said fines have not changed for 15 years and raising the 90-minute rates would lead to the use of parking spaces being better distributed across the city.
The city had the polling firm Ipsos randomly survey 700 residents on the financial plan. When asked for their preferred method of balancing the budget, residents’ top selection was raising money through corporate sponsorships and naming rights for municipal programs and facilities. Property tax increases were the least preferred option.
Budget talks will continue in January.
READ: Victoria police board pursuing almost 10 per cent budget increase in 2024
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