City council adopts 2024 financial plan

Hey there, time traveller!
This article was published 10/04/2024 (931 days ago), so information in it may no longer be current.

A few Brandon residents made a last attempt to get city council to alter this year’s municipal budget at a public hearing on Monday night, but it was ultimately given final approval without any alterations.

The hearing was the last step in approving the city’s 2024 financial plan before it’s sent to Manitoba’s Municipal Board.

Paul Spiropoulos, a business owner who spoke at a city plan open house last month, asked what landlords like himself are supposed to do when they’re restricted to a three per cent rent hike by the province this year but costs are going up by a greater amount.

“I’m looking at a tax bill that is 9.4 per cent (higher), plus two per cent for garbage and four to five per cent for water,” he said. “How are we to offset the 15 to 16 per cent we’re paying (extra) to the city?”

Citing a presentation held earlier by finance director Troy Tripp, Spiropoulos said he has an idea of where the city’s money is going, but he believes the city needs an adjustment to what it pays its staff — excluding what is paid to Brandon Police Service and Brandon Fire and Emergency Services members.

He said driving around the city is “almost embarrassing” because of the poor state of infrastructure, like roads.

“How is it possible for previous administrations, which most of you were part of, that they could manage a tax increase of 0.4 per cent, 0.5 per cent … and build a lot of infrastructure?” Spiropoulos asked council.

While he said he doesn’t mind paying his fair share of improvements to the city, he urged council to be careful with tax increases of this magnitude.

Responding to those remarks, Mayor Jeff Fawcett said the moves the city is making right now are to make a better future for Brandon.

“Myself and a lot of others, we did budget for the day,” Fawcett said of past years.

“We went into our reserves. We did everything we could to keep it low and I certainly played a role in that. Going forward, we wanted to make sure we can have a manageable city and we are having to take some bad medicine now.”

The mayor said either the city and its residents take a bigger financial hit in the present or experience more difficulties over a longer term.

“Could it be a cost politically? Maybe so, but for the people who come after us, maybe it will be better,” he said.

The city is expecting to have to increase tax revenues by 11.5 per cent in 2025, 10 per cent in 2026 and 9.9 per cent in 2027.

Danniele Carriere, a former city clerk, had several questions about the decisions made during budget deliberations.

If the city is hiring new police cadets to serve primarily as downtown security, Carriere asked why a special levy wasn’t being charged to downtown residents rather than getting the entire city to absorb the costs.

She criticized the decrease to the city’s information technology department because of the risk of cybersecurity incidents. She also questioned funding for the Westman Multicultural Festival, Brandon General Museum & Archives, the Commonwealth Air Training Plan Museum and downtown bathrooms during such a difficult fiscal year.

Merv Pawluk told council he believed a lot of them were elected to try to make life easier for residents.

He said while he’s retired, he’s concerned about people raising their families and having to deal not just with a municipal property tax increase, but an increase to the federal carbon tax and the cost of living as well.

“When you’re going through these budget deliberations, I would ask that you look at ways of reducing the budget, maybe put some of these programs on hold, maybe stretch out the repayment of some of these debts so people don’t have to struggle,” he said.

Fawcett said the city could have easily continued to kick the fiscal can down the road.

“At some point, you’re paying the piper,” Fawcett said. “We’re paying him before the provincial government or someone else takes us over and says, ‘You’re not doing your jobs.’”

Coun. Kris Desjarlais (Ward 2) said residents might not know how much work was done ahead of time to whittle down the initially proposed 13.4 per cent tax hike to the 11.2 per cent administration came in with on deliberation day.

That represented, he said, savings worth $3.5 to $4 million.

“We’ve already cut a lot of things from our capital plan that we had in place just to keep it where it is now and we’re going to be working over the next several years now to keep this manageable,” Desjarlais said.

“There are things happening all at the same time … We have aging infrastructure in dire need of repair that everyone’s asking us to fix, but we’re also trying to grow the city and so we’re borrowing money to grow the city.”

On top of that, Desjarlais said the city is also navigating inflation, the aftereffects of the COVID-19 pandemic and must spend $30 million on drainage improvements it hadn’t originally budgeted for.

He said councillors are residents and they’re struggling with these issues too.

Coun. Barry Cullen (Ward 3) said even if council had raised taxes by an additional one per cent a year over the past decade, it would have been more expensive for residents than the 9.4 per cent increase being put in place this year.

“I know it’s hard to ask for these kinds of numbers, especially from a guy who put on his election poster that he would ‘hold the line on taxes,’” Cullen said. “This is what I had to do to hold the line on taxes this year … but that’s what we needed to make this work this time around.”

When it came time for a final vote to approve the 2024 financial plan, only Coun. Bruce Luebke (Ward 6) voted against. He and Coun. Shawn Berry (Ward 7), who was absent from the meeting, were the only ones to vote against the proposed budget on deliberation day.

Luebke said in his closing remarks that administration and council need to collaborate better in the future and that council needs more timely information and a better understanding of what Brandon’s finances are.

“I have a long list of things that I felt that we … did not have a lot of opportunity to have a say in or contribute to,” Luebke said.

That includes the MNP report — Luebke said he still does not know what data was used to develop it — and the issue of council only being told about the specifics of the 2023 surplus last week, two months after budget deliberations.

“I hope for our administration that we will have a better collaborative effort as we prepare for 2025 so that we have a better understanding of where our finances are and we can be part of the process to get to the point we need to get to,” Luebke said.

This year’s budget features about $110 million in operational costs, up about $5 million from 2023. The 2025 budget is projecting about $115 million in operational spending.

Between both the City of Brandon and the Brandon School Division, Brandon residents are being levied $102.6 million in total taxes, up around 6.8 per cent from 2023. Of that, 51 per cent goes to the city and 49 per cent to the school division.

The city’s properties have a total taxable assessment of just over $3 billion in 2024, about a one per cent increase or $30 million over 2023. The bulk of assessed properties, 68 per cent, are residential, with 28 per cent made up of commercial properties and the remaining four per cent categorized as “other.”

The mill rate for residential properties is 31.158 in 2024 and 39.286 for commercial properties.

Tripp said the average single-family home assessed at a value of $281,000 will see a $184 increase in their municipal property tax this year and a $51 increase in their education property taxes.

While there’s a greater variance between the value of commercial properties, Tripp said the average commercial property valued at about $1.1 million would see a $1,076 increase in their municipal taxes and a $287 increase in their education property taxes.

When it comes to the about $54.5 million in revenue the city is receiving outside of its levied taxes, the largest component is government transfers at about $32.7 million. User fees and the sale of goods make up another $16.2 million.

Brandon is taking around $4.2 million less out of its financial reserves in 2024 compared to 2023, spending around $2.2 million less on tax-offsetting transfers and around $2 million less on transfers that offset expenses.

When it comes to net transfers into the city’s financial reserves, the $8.6 million in this year’s budget is the highest since 2015, when $9.3 million was put into reserves. Between those two years, the amount being put into reserves had been steadily decreasing.

For operational expenses, Brandon is spending the bulk of the budget on operational services at about $89.7 million. Of those services, almost half is being spent on emergency services.

Brandon is spending about $3.1 million from in its general fund to pay down debts on top of another $1.9 million from its utility fund. By the end of the year, the city is expected to have about $39.9 million in approved but not yet issued debt from its general fund and about $85.7 million from its utility fund.

The city is projected to have a 5.2 per cent debt-to-assessment ratio by the end of the year, leaving room to borrow around $54.8 million more. The Municipal Board recommends a ratio of no higher than seven per cent.

Under the debt servicing-to-revenue ratio, the city will be at 13.8 per cent. For this category, the Municipal Board recommends a ratio of no higher than 20 per cent. This would leave Brandon room to borrow $6.9 million more.

Some of the additions to this year’s budget include additional police officers and police cadets, additional paramedics and firefighters, a drainage assistance program, a medical doctor recruitment program, land drainage improvements, affordable housing initiatives and a new grant writer position.

» cslark@brandonsun.com

» X: @ColinSlark