The Southwest Booster
February 6, 2014
Swift Current City Council is proposing a new Capital Reserve Levy, with a series of six per cent increases proposed over a five year period in order to help the city generate funds for future capital expenditures.
Council passed a Notice of Motion at a special City Council meeting on Wednesday night proposing a Capital Reserve Bylaw be approved as a new funding model in an attempt to eliminate the current tax breaks afforded by utilizing subsidies from the Light and Power surplus.
The proposal calls for an initial six per cent base increase, followed each year by six per cent increases which will generate $2.5 million more in tax revenue at the end of five years.
"It's difficult. We're certainly mindful of not only what our residents see, but what hits their pocketbook. But the reality of it is we've got to play catch up for a long time. Tax minimization as a strategy has put us behind the eight ball," Mayor Jerrod Schafer said following the Feb. 5 special council meeting.
By generating additional tax revenue this new financial strategy will allow the city to reduce their reliance on debt to pay for capital expenditures. It will also allow the Light and Power surplus to be directed to other priorities instead of simply as a revenue stream to fund general operations and subsidize property taxes.
"This isn't an increase that you can just jam down in a year or that would be pretty significant. So we're phasing it in over a period of time. But the reality of it is is what we're trying to do is get our tax strategy away from being so highly subsidized," Schafer said.
"We need to get to a situation where our Light and Power dividend pays for capital in this community, and the taxes that we pay simply pay for the services that we expect on a daily basis," he added.
City Council first proposed a change to their financial strategy back in December, with the community weighing in on the proposal to council members.
"I think everybody understands out situation. The discussion has been good to sort of enlighten everybody into the financial situation in Swift Current and how our community operates, and probably what we need to do obviously moving forward to be in a good situation," Schafer said.
"We have no doubt that there's some people that are going to be dead against something like this, because some individuals don't want to pay for anything that they don't use. They don't want to contribute to an iPlex or to an aquatic facility because they don't use them. But that's not the business that we're in. We have to look after an entire community."
Schafer again highlighted that the majority of the current city debt has helped provide some important community improvements.
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