Quesnel city council is heading into budget discussions with the task of cutting the city's costs by $1-million to keep this year's tax hike to no more than three per cent.
The shortfall is due, in part, to a significant loss of its industrial assessment base combined with very little new construction.
In 2009, Northstar Lumber applied for a partial shutdown allowance, which reduced its assessment by $6.49 million, resulting in lost municipal taxes of about $335,000.
As well, another industrial site has appealed its assessment and in answer, extra funds have been put into the tax stabilization reserve in anticipation of the outcome.
And due to the property assessment freeze last year, the city must account for two years worth of depreciation on its industrial assessment base - about $500,000 in lost revenues based on 2009 rates.
On the expense side, the West Quesnel land stability program requires about $250,000 per year for five years - the city's contribution to match a $3.14 million grant received.
These types of additional funding pressures, plus regular cost increases would equal an 11 per-cent-tax increase and to avoid the hike, council directed staff Monday to present an initial budget limiting the jump to 2.4 to three per cent, which will require $1 million worth of cuts.
Staff will present this budget at the first budget session on Mon., Feb. 1 at 2 p.m.
