4.5% tax hike for ‘fiscally restrained’ Chelsea, Quebec

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by Mark Burgess on January 21, 2010

In what mayor Caryl Green called “a new era of fiscal restraint”, Chelsea, Quebec residents will see a tax increase of 4.5 per cent – or an extra $100 on the average tax bill – after “nickel and dime-ing” various municipal departments.

“We tried to balance election promises of fiscal responsibility with the services we expect,” Green said of the new council’s first budget, “so that was the challenge.”

But Green also talked about diversifying the tax base through commerce and light industry, and raised the possibility of bringing drinking water to the Chelsea villages.

The $10,220,560 budget – up almost $700,000 from last year – has a municipal mill rate of 0.8010 per $100, an increase of 4.5 per cent or what Director-General Paul St. Louis called the cost of “about a cup of coffee a day.” The mill rate is a fixed tax paid per dollar of property evaluation.

The capital expenditure budget, which covers more long-term investments and is financed by long-term loans, totals $8,699,394. Chelsea put $855,100 of its budget into repaying this long-term debt.

The major capital expenditures are almost $5 million for the Meredith Centre and $2.5 million for sewage. The Meredith money represents almost half of the cost for the community centre, scheduled to be completed by June 2011. Chelsea is expected to receive more than $6 million in funding for the centre from the federal and provincial governments.

The sewer money will go toward completing the Farm Point system – which is due to be operational this summer – and to starting a new system in Old Chelsea, for which $2,448,366 in federal and provincial money was given last summer.

For now, the treatment facility only covers Old Chelsea but that could change after the centre-village visioning process makes its recommendations on density later this winter. St. Louis said the project could be expanded all the way to the river, with users such as the Chelsea Creek and Common Ground developments, Le Nordik Spa and Innovation Chelsea paying to connect.

In conjunction with the sewer, Green also raised the idea of bringing drinking water to the centre village.

“Recognizing that any future development will place a burden and risk on existing water tables, we want to be proactive in protecting the current wells in the area by looking at alternatives, such as running a water line from the Gatineau River,” she said.

Green said she made the conscious decision to mention the possibility of the water line in her speech to rebuke criticism that council only talks about “done deals.”

The only money in the budget for the project is the cost of preliminary estimates included in the visioning budget.

“There are a lot of ‘ifs’ so that’s why it’s not in the budget,” St. Louis said, but he added that it could be started this year if the visioning process accepts a sewer that extends east of Hwy 5. He said it would make sense to do the water at the same time as the sewer to save costs by not digging up the road twice.

Green also talked about the need to diversify the tax base, lamenting how Chelsea is “heavily, heavily reliant on residential taxes.” Only 35 new homes were built in Chelsea last year, providing little new revenue, so Green talked about the need for light industry and commerce to offset this and help unburden home-owners.

“I think this council is very serious about providing other sources of revenue,” she said.

Twenty-four percent of Chelsea’s budget – or $2 million – went to the MRC to pay for services such as waste management, home assessments and especially policing. This amount is up nearly eight per cent over last year. Chelsea contributed more than $1.5 million for police. That total is down slightly from last year, owing to growth and increased crime in other municipalities that were forced to take a greater share.

The 4.5 per cent tax hike is consistent with former Mayor Jean Perras’ 10-year financial plan which in 2007 predicted such an increase year over year.

Departments told to make cuts

At election time, many Chelsea voters said they wanted to see a more frugal municipal administration, and Mayor Caryl Green took a stab at it in this budget.

In order to compensate for the amount sent to the MRC des Collines regional government, Green said all municipal departments were asked to make cuts to training and studies planned for this year in order to skim $200,000 off the budget. For example, a planning department study reviewing bylaws and revising zoning, which needed outside planners and lawyers, will have its budget slashed from $20,000 to $10,000.

“It will need to be a less major change than anticipated and we’ll do more in-house,” Director General Paul St. Louis said.

Major road paving and repairs were also put on hold. Chelsea is only spending just over $500,000 to that end this year, compared to twice or three times that amount in the past.

Despite cuts to municipal departments, Green budgeted $25,000 to hire a consultant to review one or two departments per year, evaluating their services and whether they still fit into the municipal mandate. Another $25,000 was slated for a consultant to review the municipality’s communications practices.

In accordance with a municipal bylaw that raises salaries with the cost of living, staff and council received two per cent raises. Councillors will make $10,993,10; the deputy mayor will earn $14,749,90; and the mayor’s salary is $37,408,50 from the budget.