The City is experiencing significant losses through the Saskatchewan Municipal Board (SMB) appeal process. In 2015 alone the City of Yorkton lost approximately $5,400,000 in taxable assessment.
— Shannon Bell,
Director of Finance with the City
Yorkton Council set the City’s 2016 mill rate at its regular meeting Monday.
As background Shannon Bell, Director of Finance with the City noted, “Council approved the 2016 budget which required a 0.9 per cent general increase plus a 3.0 per cent increase for capital infrastructure totaling a 3.9 per cent increase in tax revenue.”
That said, Bell added the City is facing pressure in terms of the tax base.
“The City is experiencing significant losses through the Saskatchewan Municipal Board (SMB) appeal process. In 2015 alone the City of Yorkton lost approximately $5,400,000 in taxable assessment. This equates to approximately $128,000 in taxation revenue. To date in 2016 the City of Yorkton has lost another $2,000,000 in taxable assessment. These losses are all seen in the commercial sector,” she explained.
“The 2016 taxable assessment for commercial grants in lieu has decreased by 5.94 per cent while the remaining commercial sector has seen a decrease of 1.01 per cent. The 2016 taxable assessment for multi-unit residential has increased by 14.24 per cent with the remaining of residential increasing by 0.95 per cent however these residential increases are not sufficient to cover all the losses incurred in the commercial sector.”
Bell said Council was left with two options prepared by City Administration.
“Option I was prepared by increasing the residential uniform mill rate (based on 100 per cent full assessed value) by 2.1 per cent and the commercial uniform mill rate (based on 100 per cent full assessed value) by 6.3 per cent,” she said. “This is to offset the losses experienced in the commercial sector to retain the tax revenue budgeted for 2016.
“Applying these increases to the 2016 taxable assessment, as of the date of this report, will generate approximately $20,280,000 as compared to the budgeted $20,277,380 ($2,620 excess).”
The option would see in 2016 residential will pay 52 per cent and commercial will pay 48 per cent of the total City taxes. This is consistent with prior years. For 2016 the commercial mill rate will increase 1.52 mills (6.42 per cent) and the residential mill rate will increase 0.20 mills (3.96 per cent).
“Another option, to achieve the budgeted tax revenue, would be to increase the residential uniform mill rate by 3.9 per cent and the commercial uniform mill rate by 3.9 per cent. As you can see this will bring down the impact to the commercial sector and increase the impact to the residential sector. With this option the residential sector would be subsidizing the losses that the City is experiencing in the commercial sector. However, applying these increases to the 2016 taxable assessment will only generate approximately $20,248,700 which is $28,680 shortfall,” detailed a report circulated to Council Monday.
Residential would pay 53 per cent and commercial will pay 47 per cent of the total City taxes.
This option would see the commercial/residential factor be 2.80 compared to the 2.91.
The second option was not the one Bell recommended.
“It is Finance’s opinion that the losses in the commercial sector should be offset with an increase to the commercial rates only and not the residential,” she said.
The base tax would remain constant under either option.
“As the base tax was increased in 2015 we are not looking at increasing it further for 2016. The current $710 fire and police base tax is sufficient to cover the fire and police services budget for 2016,” said Bell.
The BID Levy remains the same at 0.40 mills and together with the $200 base tax provides approximately $117,000 to YBID.
Bell also noted next year will see even more changes.
“2017 is a re-evaluation of assessments year. Re-evaluation occurs every four years and all of the properties in Yorkton will have assessments updated for the change in market conditions using a base year of January 1, 2015. Significant tax shifts are expected and a comprehensive analysis of the mill rates between commercial and residential will be completed at that time,” she said.
The intent is to send out tax notices before the end of May 2016 with a due date of June 30, 2016 to avoid any penalties
