To address Prince George’s aging infrastructure problem, city council approve a new policy Monday that will see a portion of the tax levy reinvested in civic facilities.
“There are certain asset types that are paid for just fine, our sewer rates cover our sewer operations and water pays for water, garbage pays for garbage, but there are certain asset types that don’t have this dedicated funding,” explained finance director Kris Dalio at Monday night’s council meeting.
“We don’t have a dedicated fund that reinvests for buildings like this city hall, fire halls, our police buildings, ice rink arenas, our parks, the CN Centre or the Civic Centre.”
He said the city needs to start looking at the future. Estimated replacement costs for the Aquatic Centre come in at $72 million, CN Centre is about $78 million and the Kopar Memorial Arena is at $35 million.
Dalio’s report said administration’s estimation is that the status quo exposes the city to mid and long term risk of not being able to sustain the service levels and current infrastructure.
“Currently in the budget cycle we will put money into the general infrastructure reinvestment fund every year, but it does change from time to time, so we are asking council to either choose the status quo or to indicate some direction on what this reinvestment for our future in infrastructure looks like,” said Coun. Cori Ramsay.
Council was presented with two options; either to put one per cent of the tax levy aside every year for re-investment or to use non-market change.
“Non-market change is a newer term to what used to be called new construction. If we have new development in the community, it adds assessed value that wasn’t taxed in the previous year, so it's new money,” explained Dalio.
2023’s non-market change, as well as the average non-market change over the last five years, is approximately $1.35M. Currently, one per cent of the existing tax levy equals $1.29M.
However, he said choosing a simple percentage approach would be easier for the public to understand.
“The dollar figure difference is negligible so it’s a matter of this council’s comfortability as to what message is easier to convey.”
Coun. Garth Frizzell said he was in favour of the percentage approach.
“I am leaning toward the percentage because we are coming into an era where we are going to have more of a lull and that means that the funding would go down and fluctuate for a bit and it wouldn’t be that steady,” said Frizzell. “We need that funding so I was thinking the one per cent would be more stable reliable funding.”
When it came to a vote, council unanimously voted in favour of the motion that “an increase of 1 per cent to the tax levy per year shall be added at the conclusion of all other budget deliberations and transferred to infrastructure reserves.”
