City council's new finance chairman says property taxes will rise next year but he can't say by how much.
The City of Winnipeg will increase the total pool of taxes it collects from residential and commercial properties in 2013, Transcona Coun. Russ Wyatt warned Thursday.
"I think it's fair to say there will be a tax increase, that's no secret. In terms of the amount, we're not sure how much," Wyatt said after his first turn at the helm of council's finance committee.
Property taxes rose 3.5 per cent in Winnipeg this year after a 14-year period of tax freezes and reductions. Wyatt said it would not be fiscally responsible to return to a freeze, as the cost of delivering city services is rising due to inflation and pay increases for the Winnipeg Police Service and Winnipeg Fire Paramedic Service.
"There's a financial responsibility to keep up with inflation. Otherwise, what you're going to end up having down the road is a council coming out and saying, all of a sudden, you need a 10 per cent (or) 15 per cent outrageous increase, if you do not try to govern as rationally as possible," he said.
At the same time, Wyatt said the city must try to find creative ways to reduce its costs, which he said is not easily accomplished given the job-security provisions of the city's contract with its largest union, the Canadian Union of Public Employees Local 500.
To that end, Wyatt wants council to find more ways to engage in "managed competition," a process that encourages CUPE 500 and other unions to compete for the right to deliver city services.
"I think it's crucial that if we're going to be raising taxes, at the same time we as a city have to find efficiencies in our operations. And I think in an organization as large as the City of Winnipeg, that can be done," Wyatt said.
CUPE 500 Union president Mike Davidson, however, said municipal workers earn lower wages in Winnipeg than they do in any other major Canadian city. "We took a zero wage increase," he said. "Our members are doing their part."
Wyatt said the city will not forgo transfers to reserve accounts at the end of this year to stave off a tax increase in 2013. The city needs a realistic budget as well as properly maintained reserve accounts to deal with unusual weather events.
At the end of 2012, the city plans to transfer $4.7 million into its snow-clearing reserve and $2.3 million into its mosquito-control reserve. The city saved money on snow-clearing last winter and did not have to spray for adult mosquitoes this summer.
Even with those transfers, Winnipeg chief financial officer Mike Ruta told the finance committee the city is on pace to post a $7.7-million surplus at the end of 2012, according to financial data from the end of September. That projection stood at $5.4 million in the CFO's last report.
Winnipeg's operating budget in 2012
Projected property-tax revenue for 2012
Winnipeg's operating budget in 2011
Property taxes collected in 2011
3.5 per cent
Property-tax hike from 2011 to 2012
4.7 per cent
Property-tax revenue increase from 2011 to 2012, thanks to new properties added to the pool
-- Source: 2012 operating budget