Financial Plan | 2023 – 2027

2023-2027 Financial Plan

Property Taxes

By May 15 of every year, City Council must determine taxation rates for the year. While property taxes are typically based on property values, the law states that the City can only tax what is needed for the year. So while property values increased 13% this year, tax rates are set based on actual operating costs and required capital expenditures. After considering the City’s position and the needs of the community, City Council has voted in favour of a 4.2% tax increase on residential properties, which is well below the annual inflation rate for 2023.

Budget

The City recently completed the 2023-2027 Financial Plan, providing a roadmap of probable costs and incomes for the next 5 years. As needs change, modifications to this plan may be necessary.

Driven by recovery funding support, more than half (55%) of the City’s anticipated revenue in 2023 comes from provincial or federal grants, while only about 29% comes from taxation.

Of the total taxes collected, about 37% goes to other governing bodies: 23% goes to the Province for schools, 4% to the hospital, 1% to transit, and the remaining 8% to the TNRD, which covers the library, Eco-Depot, and other services.

Municipal operating expenses include about 25% for the RCMP and Fire Rescue, 19% for water, sewer, and garbage, 15% for the arena, pool and parks, 15% for roads, 5% for flood recovery, and 6% for development. Capital expenditures, such as transportation infrastructure, are estimated at $33.6 million for 2023. As is required by Local Government legislation, the City establishes a balanced budget for the year.

The draft budget, prepared by City staff with support of contractors, was discussed with council at Committee of the Whole (COW) meetings that were open to the public on March 15 (agenda | report),  April 1 (agenda |  report), April 6, 2023 (agenda  |  report), April 18 (agenda |  report), and May 2, 2023 (agenda | report).  It was also shared with the public at an Open House at the Merritt Civic Centre on April 19 at 6pm. The final budget was approved at a regular council meeting May 9, 2023.  (agenda | report).

The budget provides an outline of costs, including capital and operational expenditures, as well as grants and tax implications. The draft budget includes departmental requests, including Water Sewer capital requests, Water Operating requests and General Fund capital requests.  (View Spreadsheet). Discussions highlighted increased costs due to inflation, supply chain issues and increased regulations, as well as much-needed capital projects and flood recovery.  Discourse also covered funding sources, grants, user fees and impacts on taxpayers.

 See the final  Property Tax Rate Bylaw 2352, 2023
See the final 2023-2027 Financial Plan, Bylaw 2351, 2023

The Financial Plan Process

Council is required to adopt a Five-Year Financial Plan Bylaw by May 15, 2023. Council has begun deliberations on the 2023 -2027 Financial Plan.

Council’s goal is to develop a financial plan that meets the requirements of the community while at the same time keeping property taxes to an acceptable level. Public input is critical to this process, as it can assist Council with setting priorities and service levels.

Public input and involvement in the financial plan process ensures that Council has relevant information before deciding how property tax dollars are to be spent on the wide range of functions provided by the municipality.

Council has directed staff to present a budget showing reductions in the operating expenses and incorporating the infrastructure funding needs for the future. Public input on priorities will be considered by staff when preparing the draft budget.

PROPERTY TAXES & ASSESSMENT

Your property tax bill includes charges from other authorities including Regional District, Hospital District and School.

The municipal property tax rate for 2023 has not been determined yet, but for discussion purposes a 5% tax rate increase for the average house would result in a $95 increase in municipal taxes.

BC Assessment maintains assessments throughout the province for property taxation purposes. The completed roll is released in January of each year. Property owners then have an opportunity to appeal their assessment. After the appeal period BC Assessment releases the revised roll, which municipalities use to set their property tax rates. The average increase for a single family residential property is 14% for 2023 roll. Visit bcassessment.ca.

CONSOLIDATED OPERATIONS

The City of Merritt operates four separate funds; general, water, sewer and transit. The funds are consolidated for reporting purposes, but are independent. Revenues raised in one fund are used to offset the expenses within that fund.

Property taxes are the major source of revenue for the general and transit funds. For the water and sewer funds, revenues come from user fees and parcel taxes. There is no plan to increase water and sewer user fees in 2023.
To be an active participant in the budget process, attend the meetings or follow them on the website and be sure to provide your input.

DEBT

Debt is an option to fund capital projects. Historically, the City has considered debt on a project by project basis. The use of debt requires elector approval if it is for over five years. A municipality’s ability to incur debt is subject to liability servicing limits.

Input welcome at budget meetings and open house or by email to sheila.thiessen@merritt.ca.