On May 16, 2016, Chestermere City Council approved the 2016 Capital and Operating budgets by unanimous vote that showed a municipal tax rate cut of -4.9%. As word spread following the meeting, residents began sharing their feelings and opinions on this, and no one that I spoke to is celebrating.
I contacted some Chestermere residents and asked for their feedback on this recently released financial plan for our city. I first contacted Laurie Bold, who took a huge interest in the decisions and operations of the city following the December 18th announcement of the CUI rates being increased. Bold launched two petitions, one regarding CUI that was deemed invalid by the City of Chestermere and the other, which called into question city council and staff, is still yet to be ruled on by the Minister of Municipal Affairs.
Bold had this to say following the 2016 budget approval by council, “I do believe the new tax rate indicates that perhaps they listened to the residents??? Unfortunately the education increase defeats the good intentions of the City lowering the tax rate because overall (all in) most residents taxes will continue to go up. The decrease made by the City will probably go un-noticed”.
“People will look at the final number…did it go up or did it go down or stay the same? I believe the overall impact will still be an increase for the majority of residents. As far as the budget…I do have some concerns…I’m still working with a few people regarding them. So for now…no comment”, said Bold.
Another Chestermere resident, Robert Inkpen, says this new budget is nothing more than a reaction to the petitions. “At first glance it appears the Mayor and Council might finally be getting it. But after you look through the smoke and mirrors, you see that this is nothing more than a reaction to the Petition and offers a little short term relief but changes nothing longer term”.
Inkpen continued, “Where does this budget address the need to improve our residential/non-residential tax ratio from 96% to something resembling viability, alone the 75% that we should have? This imbalance, which is commonly seen as unworkable by the vast majority of communities throughout Canada, is the major cause of our soaring tax bills. In my case, I paid $1,225 in 2007…. $2,692 in 2015… an increase of 120%”.
“There appears to be little or no cuts anywhere but the Development department which has offsetting revenues cuts. As this budget is not in the same format as the audited 2015 financial statements, one cannot determine if any salaries have been cut. We do know that salaries grew 75% since 2010 while population grew only
30%”, added Inkpen.
Inkpen then made reference to the submission that the City of Chestermere ran in the Chestermere Anchor City News regarding the budget. “In their two-page ad in today’s (May 19th) Anchor, they show a mill rate comparison with other communities, presumably to convince us how reasonable our taxes are. If you want a better comparison that factors assessments, mill rate and non-residential tax base, let’s look at residential taxes per capita.
Chestermere -$966.00
Cochrane – $810.00
Airdrie – $533.00
Strathmore – $650.00
Comparative mill rates are meaningless.
“And then there is the capital budget. The upgrade to TWP 240 at an estimated cost of $16,785,000. This upgrade is necessary if Council is to have a snowball’s chance
in @#$% to sell lots from the $8,200,000 land purchase they made …Council puts forward, in their presentation, that it will be funded “$6,000,000 grant from the
Federal and Provincial governments, $1,000,000 from developers and $9,875,000 from offsite levies” (offsite levies are paid by the developer). Guess what…we are the developer! Council may try to mask it by setting up the “development” equivalent of
CUI, but the City will own that company, the City will be the developer”, stated Inkpen.
Al Kersch, long time Chestermere resident whom frequents council meetings and often asks questions of council, said, “Councillor Hutchison stated that the Anniversary Park development was paid for by provincial grants and not city tax money. Council will now spend $2.2 million dollars to upgrade The Cove Beach. There are better places to invest grant money. The mayor made it clear that they were using resident’s feedback as input to the budget process. I have not heard from a single person that has said they have been asked for feedback to support the budgeting process and setting the direction for the city”.
I asked Mr. Kersch about the mill rate reduction to which he responded, “The reduction in the mill rate by City Council came as a result of the overwhelming response to the petitions. This response carried a very clear message to city council ‘Reduce our taxes’. The mill rate reduction created a very small revenue challenge to City council. It reduced their revenues by $102,660 dollars or .62%. City council in their preliminary budget for 2016 (created in late 2014 and early 2015) was planning between 1.1% – 3.25% tax increase and now we have a 4.9% reduction. Is there enough cost reduction to support this decision? Absolutely not!”.
Kersch asked Council one question during the question and answer period in the May 16th council meeting, I asked him if he had received a satisfactory response to his question regarding real cost reduction. He responded, “None that are apparent. The largest area of reduction was in a category referred to as ‘requisitions and reserves’. If reserves were the largest areas of cost reduction in this category then this cannot be considered a real cost reduction. One of my questions was related to this item. At this point in time there has been no response to this question”.
There were other residents that took to social media that did not wish to participate in this article, but their comments reflected much of what was being mentioned by the people I spoke with.
Lastly, I reached out to Steve Grande, who has had quite a bit to say regarding taxes, decisions of council and staff and the sustainability of Chestermere. “Unless someone shows me otherwise, and I’ve looked at the numbers countless times, our taxes are the highest in the region. What we are seeing right now is our council is making decisions based on their dream and that dream is a nightmare. The best thing they could do is to stop. Step back from this and take another look before we start putting money into certain projects”.
“They (council) seem to have this fixation with the mill rate. What I found is that up until two months ago, the City of Chestermere had no idea what that actually meant. I pointed out to them that the power point they had on their website was misleading. It was deceiving. It was that they were either intentionally trying to deceive somebody or they were totally clueless with what they were suppose to be doing because it was like telling half the story without telling the other half – and you need both. Taxes are a teeter-totter, it’s how municipal taxes work. If your expenses are the same and your assessed value goes up, your mill rate goes down. If your assessed value stays the same, your mill rate should stay the same. If your assessed value goes down, your mill rate goes up. So if our expenses go up 10%, then it’s a combination of first, the assessment and then the mill rate. So they take the total assessment and they say ok we need this to go up 10% because our expenses are going up 10%, and so we need to do an assessment and then they establish the mill rate”, explained Grande.
“You can talk about mill rate all you want – its’ a fictional number. The number that matters is how much is coming out of my pocket. So people are hearing that the mill rate goes down and they think so have their taxes. The truth just wasn’t out there. So now what we have is the City of Chestermere is saying that on average, we (the city) want the tax money that comes out of residents pocket to stay the same. So some will go down and some will go up, but they want them to be the same. Awesome. Except, that here’s’ the situation – is that it’s a Band-Aid on a disease. They haven’t addressed the disease,” adds Grande.
“I can appreciate the fact that they at least recognized that the concerns of the people, but we need to beat this down. If you don’t fix the root of the problem, we’re really no further ahead and that’s what scares me. I would rather pay 10% this year but have that money dedicated to fixing this problem. That’s not by hiring another economic development person. You take the $2.2 million that’s going into the Cove Beach – just put a chain link fence around it and leave it for a few years. Take that $2.2 million that you’re getting form the Province and invest it into infrastructure in non-residential development – and away you go. I came out earlier and said that this is the story of the Emperors New Clothes. They say ‘look at how beautiful it is’. Let’s take the high road and let’s fix the problem”, said Grande.
