Councils OKs 3% 2011 tax increase

  • Mar. 15, 2011 6:00 p.m.

By Treena Mielke

Rimbey town council unanimously approved a draft budget that will see taxes increase by three per cent and tax incentives eliminated.

At its regular meeting March 9, council gave the thumbs up to the operational and capital draft budgets with revenues of $5.963 million, expenditures of $5.945 million and a $18,681 surplus.

The increase in taxes will see a property owner whose home is assessed at $190,000 pay about $26 more in municipal taxes.

The approved draft budget will be presented to the public at a special meeting March 22 at 7 p.m. at the Rimbey Community Centre.

The mill rate will be set once all requisitions including school and linear tax have been received.

Council received some criticism of its decision to eliminate the tax incentives that affect 105 properties and will result in an additional $133,000 municipal taxes, but the mayor and several councillors defended their stand, insisting the incentives were illegal.

Mayor Sheldon Ibbotson said the town received legal advice from Brownlee LLP about the incentives which clearly indicates the practise is illegal.

“I don’t want to argue about this, but I’ve read this thing over and over and I don’t want to do something that’s illegal,” he said.

Coun. Paul Payson agreed.

“This has been a very difficult one, it’s hard to feel good about the situation either way, but we’re obligated to follow the law.”

Coun. Gail Rondeel said eliminating the tax incentives has helped keep the tax increase down.

“One of the problems is if this keeps happening, everybody’s taxes will go up nine per cent rather than three per cent. Council is definitely not against growth. We are all for growth and we’re all for new development. This hurts all of us, but we were told many times we have the whole town to look after and although we want to see it grow, we’re looking at raising everybody else’s taxes quite considerably. Can we explain to the rest of the town we had to raise your taxes nine per cent so some people could enjoy no taxes?

Former councillor Wayne Clarke, who spoke against council’s decision to eliminate the tax incentive, questioned the town’s transparency about the issue.

“Talking to some of the folks that are in line for getting these incentives, they weren’t informed. Why were they not informed?

The mayor said budget meetings when the matter was discussed were open to the public.

Clarke said the tax incentives were in place before he was elected in 2004.

“We voted on them (the incentives) every year,” he said. “And we never had received legal advice that said they weren’t valid.”

When questioned by the mayor as to whether the council had received legal advice about the tax incentives Clarke replied, “Absolutely.”

However, to date, no such record has been found.

“There’s still (other) communities doing it,” Clarke added.

Previously, tax incentives were given over five years to developers who subdivided existing lots, renovated existing commercial buildings, built new commercial buildings, built rental multi-family residential homes, or demolished an older building to erect a new building in the core area of town.

The incentives reduced the residential portion of the municipal tax by 85 per cent, and an 88-per-cent municipal tax rebate was realized on the commercial portion, said assistant CAO Ryan Maier.

Rick Pankiw, who also spoke against the elimination of the incentives, said it encourages developers to build and families to move to Rimbey.

“In six years you end up collecting a lot more tax dollars,” he said. “I think we have to look outside the bubble here,” he said.

However, the mayor said tax incentives are not the only reason developers and families move to Rimbey.

“Tax incentives are one factor, but they’re not the only factor. Recreation, schools, hospital, police stations, there’s a lot of things that attract people to town.”

Rimbey resident Melvin Durand, who was in the gallery, suggested council consider another legal opinion on the issue.

However, council in a 3-2 vote, with councillors Gail Rondeel and Jack Webb voting in favour of tabling the tax incentives, opted to stick to their original decision to cancel the incentives.

“The point is it’s not lawful. I don’t want to do something that isn’t by the rules. I don’t see the sense of looking for a second, third and fourth opinion,” said Ibbotson.

In its letter to council, the law firm of Brownlee LLP said the town may decide to maintain the status quo by leaving the incentives in place, however, they recommended against making that decision.

They said it is not advisable for a municipality to maintain invalid bylaws and policies and that these could be subject to challenge and the town would risk incurring considerable and unnecessary legal costs in the event of such a challenge.

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