Charlottetown tax rate unchanged

There will be no increase in the tax rate for Charlottetown residents despite a cut of five per cent to the city's grant from the province.

Mayor Clifford Lee disappointed in 5% cut to city's provincial grant

The 2012-2013 budget was presented to Charlottetown city council Wednesday. (CBC)

There will be no increase in the tax rate for Charlottetown residents despite a cut of five per cent to the city's grant from the province.

While tax rates will not go up, finance committee chair Cecil Villard told council the city expects to raise almost $1 million more in property taxes in 2012.

"There's additional costs that every department has to incur every year," Villard told reporters. "A lot of these contracts are waste contracts, for example ... you have to bring those costs forward."

"If there's no additional money coming in, then at the operational level, you'll have less money available to you." 

The funding cut from the government comes to about $367,000. Villard called that cut unexpected and significant.

Budget highlights

  2011 (projected) 2012 (budget)
Revenue $52.4M $53.5M
Expenditures $50.9M $53.5M
Property taxes $25.8M $26.8M
Provincial Grant $11.3M $10.9M
Police $7.2M $8.1M
Tourism $286,485 $272,600
Event attraction $310,247 $268,100

Overall, revenues are expected to increase from about $42.6 million to about $43.1 million, excluding the water and sewer utility.

"I still believe as a city we're providing necessary services to citizens," Charlottetown Mayor Clifford Lee said Wednesday.

The city had already announced an increase in water and sewer rates of $30 a year to help pay for upgrades to the sewer system.

The budget also includes increases in spending to most departments. The largest are to the police and fire departments. The police department budget is up more than 10 per cent. The budget includes $250,000 for the fire department to address "facility needs."

The notable exceptions are tourism and event attraction. The combined budget in those two areas is down just over nine per cent.

The city is projecting a razor-thin surplus of $2,332 on its $53.5 million 2012 budget.

Lee was disappointed in the cuts, saying the city should've received even more than the $367,000 that was actually cut in the provincial municipal grant.

 "It certainly changes everything. Some of the items identified that weren't completed last year, we would've dearly loved to have done them this year as new initiatives this year."

The city had an almost $400,000 surplus at the end of 2011 and more than $500,000 was carried into 2012.

But three councillors voted agains the budget, including Coun. Jason Coady, who said he was worried about the city's overall $71-million net debt.

"In 2006 they come up with a capital debt reduction strategy where you wouldn't borrow anymore than you paid back and last year we blew that out of the water obviously, because we only paid back about $2.5 million and went out and borrowed about $5 million," Coady said.