Brandon bracing for soaring property taxes

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This article was published 15/12/2023 (662 days ago), so information in it may no longer be current.

BRANDON — The City of Brandon will need to impose “extraordinarily” larger property tax increases over the next decade to remain sustainable, according to a new report prepared by accounting firm MNP.

The document presented to administration this week suggests two scenarios for taxation over the next 10 years, blaming the situation largely on the city keeping property taxes too low to account for rising costs.

Brandon officials are to hold a media briefing this morning at city hall, but provided an early copy to the Sun, as well as an exclusive interview with city manager Ron Bowles.

The report outlines a worst-case scenario, he said.

According to the report’s executive summary: “While low taxes and efficient municipal operations were identified as strengths, there is clear indication that tax increases have not been sufficient to reflect inflation and have resulted in diminished reserves at a time when Brandon requires significant investment in infrastructure.”

The first scenario would have property taxes rise approximately 13 per cent a year between 2024 and 2027, and approximately three per cent annually from 2028 through 2033.

The second would have increases of nine per cent a year over the same time frame. It would require delaying several capital projects.

These scenarios assume financial reserves will be “significantly depleted to fund the capital plan,” hitting a low of just $7 million in savings by 2029.

The proposed hikes — along with boosts to development cost charge levies, regular utility rate raises, the introduction of drainage fees for commercial and residential properties and expanding revenues at the landfill — are needed to maintain municipal services and infrastructure and replace aging infrastructure, the report says.

The study compared Brandon’s property tax rates to those in Fredericton, N.B., Medicine Hat and Grande Prairie, Alta., North Bay, Ont., and Prince Albert, Sask.

On average, Brandon’s taxes are 47 per cent lower than in those municipalities.

Speaking with the Sun, the city manager said Brandon will be requesting assistance from the province because of the seven-years-long municipal funding freeze under the previous Tory government.

“They’ve just taken it off, which is great,” Bowles said. “To get more funding for the police, even more funding for the ambulance and a bunch of other big capital projects, it’s awesome. But we have a lot of years to make up for and there’s still no commitment for the future.”

Despite the report outlining significant financial hurdles, Bowles made the case the western Manitoba city is in a good place because most municipalities don’t have access to such data.

However, “Mayor (Jeff) Fawcett and council have been clear with me that 13 per cent is too high,” Bowles said.

The biggest factor in this financial picture, Bowles said, is the city’s infrastructure deficit.

Sewer and water systems are at capacity, much of the city’s fleet of vehicles is aging, and there are items, such as the ice plant at the Sportsplex, that should have been replaced in the last couple of years, he said.

Other factors include inflation and the city taking on some costs relating to tackling social issues downtown.

Bowles said, just like residents are seeing at the grocery store, the city is seeing larger bills come in when it tenders projects.

At this point, the city manager said he has not received any direction from council to reduce services or reduce staffing levels.

MNP conducted interviews with all members of Brandon city council between July 31 and Aug. 8.

On the positive side, MNP found councillors felt the city is running as efficiently as possible. However, the interviews also identified friction between council and staff.

“There was general agreement the budgeting process is not yielding the tax increases necessary and the current process can create some animosity between the administration and council instead of encouraging the two groups to work together… There is an understanding that either taxes need to increase or services need to be reduced,” the report states.

Bowles said the report would be on the agenda for the Dec. 18 regular meeting of council.

— Brandon Sun