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City Council, November 20

Millage and Parking Fees to rise in 2008
Fire Department costs a heavier burden
Warwick Jones (Marc Knapp is on vacation)

It was hardly a surprise. The Mayor when questioned during the election campaign said he could not rule out a tax increase for fiscal 2008. During a campaign, what politician is going to “fess” up to a tax increase? The absence of a denial was really an admission. So we now have the prospect in the City of a 4.3% increase in property taxes. In very broad terms – with City now accounting for roughly half of residents’ property taxes - overall taxes for most property owners will rise around 2-3% - hardly a disaster.

The Mayor made a budget presentation to Council last which highlighted the cost increases anticipated next year. Not surprisingly, the major increase related to the City Fire Department. The increases highlighted by the Mayor were:

Fire Service Disciplines $2.40 million
COLA for employees $1.57
Health Care $0.61
Police $0.50
Total $5.08 million

To finance the increase spending, the property tax rate and garage parking fees are to be raised. The property tax rate will go from 73.8 mills to 77.1 mills and bring in an estimated $2.6 million. The increase in parking rates varies with the garage and the time of stay. Most of the garages will raise monthly rates by 10% to $110 a month. The rates for the first and second half hours will rise by a third to $1 per half hour. Rates thereafter will stay steady. The Queen Street and St Phillip Street garages will hold rates steady whereas the Majestic Square and Wentworth Street garages will increase monthly rates by 25% but not change transient rates. No figure was given as to the likely increase in revenue from parking garages. Revenue presently is believed to be in the order of $14 million a year so the increased charges could lift it by $2 million perhaps.

Complete budget handed to members after presentation
The Mayor did not break out figures for the whole budget and we are not able to make a detailed analysis of the increase in all costs and revenues. The proposed and complete budget however was given to Council members at the end of his presentation. The Mayor urged Council members to consider the figures and come back to him with comments and suggestions before the budget was adopted within the next few weeks. Some Council members chose not to wait and questioned the figures regardless.

Taxes steady or higher?
The Mayor spent much time reminding Council members how modest City tax increases had been over the last 20 years. Indeed there had been no tax increase since 1999, he said. And then we had the discussion we have every budget session as to whether there really had been tax increases over the period. This time it was encouraged by Council member Tinkler who spoke of the misinformation in the community and the mistaken belief that taxes had increased. Some of us groaned at this pandering to the Mayor and Council member Fishburne tried to keep the Council discussion honest when he questioned some of the Mayor’s conclusions.

In summary, millage rates may well have gone down over the years, but the decline was more than offset by the increase in the values of properties. Multiplying the millage rate by the assessed value (related to the market price) determines the property tax. So the Mayor is right, taxes have declined if one looks only at the millage rate, but they have not declined if you look at the sum. So let’s move on!

Implementing recommendations of Task Force
The Mayor said that the City was committed to implementing the recommendation of the Task Force appointed in the wake of the Sofa Store fire. He went on to speak of the changes that have already been implemented and now a matter of record. The Cost of Living Adjustment (COLA) is something that most enterprises have to live with. This year the increase was equal to 2.5%. The health care costs reflect the higher charges passed on from the new administrator for the City, Blue Cross/Blue Shield. The Mayor pointed out that after taking into account the saving accruing from the switch in the administration this year, the cost of the health care service had risen well below the average national rate over the last 3 years. The increase in Police Department costs reflects the planned addition of more officers largely.

The City plans to put the complete budget on its web site today. We hope to undertake a fuller analysis over the next few days.

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