A tax increase that was rejected last week came back to council this week, and as a result, water rates will go up this year.
When the proposed rate increase came before council on April 6, the request from staff was rejected. Coun. Dave Fenn said he wanted to deal with rate increase proposals before budget deliberations begin and led the charge against an increase. He reiterated his concern when it came up at a special meeting of council Tuesday (April 13).
"Why now and not months ago?" Fenn asked.
Deputy Treasurer Ralph Hughes explained that staff doesn't know if the water fund will cover all the costs in any given year until after the previous year's numbers are determined and those figures generally aren't available until the second quarter.
The District of Squamish deputy treasurer reviewed the report he submitted to council and realized that there was a mistake in the report.
The report indicated staff proposed an increase of $15.42 from $147.24 to $162.66 a year.In fact, staff was looking for an increase of $7.68 to take the annual levy to $159.92. The increase represents a 5.25 per cent jump.
The previously rejected tax hike was carried unanimously.
Administrator Kim Anema told council that the district is involved in a dispute with BC Rail over taxation in which there is $45,000 at stake.
The water rate hike, which would raise an additional $52,500 for the District, will cover the shortfall in the budget if BCR does not pay the amount.
Anema pointed out to council that one way to eliminate water rate increases is to move to water metering.
If every water user in Squamish had a water meter, the district could determine the amounts of water being used by individual buildings and bill accordingly.
Along with discussing the water rate, councillors spent a few minutes discussing the five-year financial plan at the special meeting.
There was a short discussion about what is being dubbed the two per cent solution. Under the two per cent solution, staff will be directed to cut two per cent from the core budgets of each municipal department.
Mayor Ian Sutherland polled the council members to determine the level of support for the two per cent solution.
Coun. Corinne Lonsdale said she doesn't support the concept. Coun. Raj Kahlon said he would support the concept if it doesn't come on the backs of front-line workers. Coun. Ray Peters said he supported the idea although he had conditions similar to Kahlon.
"Cutting the budget shouldn't be about cutting numbers but instead cutting programs," Anema told council. "This [the two per cent solution] will impact various departments in various ways."
The administrator pointed out that a department like finance will have trouble cutting two per cent from its core budget because much of the department's spending is required. "A two per cent cut is more challenging for some departments," he said.
Sutherland argued that the two per cent saving can come from vacant job positions and from the year-end surpluses that almost always appear at the end of each budget year.
Budget discussions will continue through this month and more debate is expected around the two per cent solution.