Serge Rousselle, Minister of Local Government
Sackville Town Council has delayed passing the 2018 municipal budget until January after asking the provincial minister of local government for nearly $60,000 to cover its financial shortfall.
It means that the town will defer any property tax increases until council hears from the minister, Serge Rousselle.
In a letter to Rousselle, Mayor Higham blames the province for the town’s predicament because Service New Brunswick oversaw a new tax assessment system that inflated the assessed value of many properties.
To correct the situation, the province reduced Sackville’s assessments by $9.2 million cutting the town’s tax base from $629 million to just under $620 million.
“It seems that they’re penalizing our taxpayers for their [in]competency,” Higham said during Monday’s council meeting. “That doesn’t seem fair.”
Figures attached to Higham’s letter indicate that the province’s financial assistance of $51,854 to cover the town’s lost revenue falls far short of the $108,500 in actual losses. Therefore, the town is seeking an additional $56,646 to make up the difference.
To read Mayor Higham’s letter, click here.
Tax increases
At a special budget meeting on November 29, all seven councillors in attendance asked town staff to draft a 2018 budget that included a small property tax increase to cover the budget shortfall.
Council chose the tax hike instead of cutting services, borrowing the money or taking it out of the capital budget or operating reserves.
The tax increases would have raised residential rates one cent to $1.56 per $100 of assessment, (an extra $10 for a home assessed at $100,000) and business rates one-and-a-half cents to $4.545 per $100 of assessment, ($15 more for a business assessed at $100,000.)
To read my coverage of the November 29 meeting, click here.
Town seeks other changes
Mayor Higham’s letter also asks Serge Rousselle to consider changes in the way the province calculates how much money Sackville receives in “equalization” payments.
The equalization system, which includes a component called “core funding,” is designed to ensure that Sackville residents receive an average level of service at an average level of taxation when compared to residents of similar-sized communities.
Sackville’s treasurer presented a chart to council in November showing that nine other similar-sized towns will be getting an average of $669,753 in equalization and core funding payments next year while Sackville will receive only $66,007, about one-tenth as much. (Sackville receives only the core funding component and no equalization payment.)
To view Treasurer Beal’s chart, click here.
To view a fuller comparison of these similarly sized towns including comparisons of their tax bases and more explanation of core funding and equalization, click here.
Other Sackville grievances
During Monday’s meeting, the mayor said he also wants the province to include Mount Allison’s student population in the calculations for provincial equalization support as well as the use of Sackville’s firefighters and police to respond to emergencies on the TransCanada Highway.
He says Sackville should also be more fully compensated for the subsidized services, including fire protection, that the town provides to the residents of local service districts (LSDs) outside its boundaries.
“Those are all elements that our taxpayers are paying,” Higham said. “We’re looking just for fairness.”
Provincial grant calculations
This table shows that, for municipal tax purposes, Sackville is one of nine towns in Group C. There are a total of seven groups of communities and the groups (A to G) are based on the role communities fulfill within their region and the corresponding scope and level of services they provide.
The core funding that these towns receive from the province is calculated at 16 cents per $100 of the non-residential tax base (excluding provincial and municipal properties).
The province compares Sackville to the other towns in Group C when it calculates equalization payments designed to allow each community to provide an average level of municipal services at an average tax rate. Municipal services include fire and police protection, garbage collection, recreation and cultural services as well as the maintenance of sidewalks and streets.
According to the province, the standard expenditure calculated for Sackville is $1,386 per capita (based on group average and adjusted for density). With a per capita tax base of $113,213, the province says Sackville can raise $1,410 per capita on its own at an average tax rate and therefore, does not qualify for equalization funding.
(Sources: Statistics Canada, 2016 Census of New Brunswick, 2018 Tax Bases and Community Funding and Equalization Grant and Marc André Chiasson, Communications officer, New Brunswick Department of Environment and Local Government & Office of the Attorney General, December 1, 2017).
For years the municipality has complained of not getting credit for the student population or compinsation enough for services provided to cover the TCH and LSD.
Letters were written, meetings attended yet no change.
Here we are again writing a letter crying fowl. However we as a municipality have control over our own fate. We have benefited from government funding for many projects yet we continue to stand with our hand out asking others to fix our financial woes and pay for the sometimes elaborate ways of conducting our business.
I wonder how long it took staff to prepare this comparative information and how long it took the Mayor to pen the letter?
Time that might have been better spent starting a plan to identify means to create revenue and to delivery services more efficiently.
What about parking meters, what about increasing user fees or start applying user fees to programs?
What about charging a fee to the university for street closures in conjunction with their activities?
What about actually creating a snow removal policy that would identify what streets qualify for snow clearing between road and sidewalk so monies are only spent for that service in priority areas.
Recently the town Red Cross swim program was taken over by the Sackville swim club yet the savings were incorporated into other budget items as opposed to sharing that benefit with tax payers.
I would suggest the time of placing full blame of our financial woes of this town on the province needs to stop.
We must look within and find a way to live within our means just like everyone else who maintains a home or pays rent in this town does.
The status quo way of the municipality developing its budgets needs to stop and those responsible become creative.
Dear Mr. Mesheau
Your suggestions will make the remaining population of Sackville leave this town. Can’t you see that the university is already short of funds? Can’t you see that houses donot sell fast or well in this town (=lack of interest in living in this town)? If the town,considers anyone of your suggestions you will soon have to discuss a ghost town issue. Don’t you see that every 3-4 years one business closes in this town?
I wonder who was on the previous town council when spending more than $40,000 on an investigation of volunteer members of this town was approved. Was it necessary or did it prove to be useful? No.. Now, do you want to make up for that by charging tax payers, again, via parking meters? It seems the town is only short of $60,000, right? I believe, we could have been in much better shape if tax payers money was not used to fight with a volunteer member of this town.
If there is any saving it should come from careful budget planning in the town hall and not outside.
Mr Azi,
Adding a few means of revenue generation will not make this town a ghost town.
Along with revenue generation we will require resourceful thinking to find more efficient ways to deliver services. As well we need an active approach to increasing private business development that would hopefully increase the business tax base so residential owners don’t have to carry the tax burden alone.
You indicate that property sales are down due to a lack of interest in our town that may be only one reason.
Not all of us have public sector jobs or incomes to support the burden of owning a home in this community. The property tax alone is not appealing to all.
What I have noticed are a lot of older homes that are rentals close to the university that are vacant. Those neighborhoods have been subject to off campus housing issues and families no longer want to expose their families to those issues. They are leaving or considering leaving those once vibrant neighborhoods and opting for other choices in or close to town.
As for the thought the university is short funds, when I see numbers reported that I believe noted MTA’s total budget around 55 million of which New Brunswickers fund through their taxes of around 25 million I somehow wonder if by us pointing out only the municipality on finding better means to efficiently deliver service we are missing calling out other tax payer funded body’s in doing the same.
Lots to consider.
Thank you
I am not Mr., I am Mrs. 🙂 I thought you knew me …I do not think we can fully discuss these options on this page. But I do very much hope that by now, you agree with me that the money used for “investigation” of volunteer members of this town was a waste of tax payers money. The issue is not the report or what is written in it or who has written that. The issue in my view is not going through all steps prior to that so that tax payers money would not be used for what was not absolutely necessary. Could not we sit and talk or at least consider that before such drastic actions? You were on the council when that was approved and if you and some others did not approve those actions, including what was spent on lawyers we were not short of $60,000 for sure. And we did not need to come up with ideas you and others proposed. Honestly, why the town should spend more than $40,000 on a secret report and then not remove the snow on some streets (as you proposed)?
Hello Azi , I do apologize for my error. We have never been formally introduced I do not believe, if we have again I appologize for not knowing who you were.
First of all the report is no longer a secret. As well previous budget years for operational cost do not carry over from one year to another so the amount you stated is likely not effecting the current budget being preposed for 2018.
There are many decisions made by councils over decades of representation and we can choose to get stuck in the past or learn from how we did things and hope we do better in the future.
The report called out many improvements required on the part of the town and I would hope that we have all learned from it.
I can only hope that the current council puts policy in place to ensure our municipal budgets are more then a number with a percentage increase year over year.
As a person who works in the private sector without benefit of healthy pensions and long term employment in my 35 years in the work force my ability to hopefully enjoy a comfortable retirement is limited. I am concerned that I will have to work well into my 70’s to be able to keep a roof over our heads and fear the cost to live in this town which I was born and raised in will be out of reach and my wife and I will be forced to go elsewhere. Then I worry about what it means for my son and wife who have chosen to make Sackville there home as well. Will they be able to continue to afford to live here as well and raise a family?
Let’s put things in perspective.