Iqaluit council passes 2012 municipal budget

In the City of Iqaluit’s 2012 budget, governments and institutions will pay 13.5 per cent more on water rates and face a tax rate increase of 3.21 mills. Commercial property owners will see a tax increase of one mill, while homewners will see no property tax increase. But homeowners and businesses will pay 2 per cent more on their water bills. (FILE PHOTO)

(Updated from story first published Jan. 6)

Iqaluit City Council unanimously passed a $34 million balanced budget for 2012 Jan. 10.

Government will suffer the biggest hit in water rate and tax increases contained in the City of Iqaluit’s 2012 budget.

But the city’s projected 2012 operating budget of $29.4 million mostly protects residential and commercial ratepayers from any painful rate hikes.

Members of the Iqaluit city council finance committee accepted the proposed budget Jan. 4, then passed it on the full council, who voted to accept it Jan. 10.

Water rate increases were approved for the city after lengthy discussions about what would be fair for homeowners and businesses.

The finance committee members decided that residential and business users will pay two per cent more in their water bills.

But government and institutional users will face a whopping 13.5 per cent hike in their water bills.

That’s because upgrading the city’s water assets — including utilidor lines, the Lake Geraldine dam, sewers, and work on the sewage treatment plant — are the city’s top capital spending priorities for 2012, said John Hussey, Iqaluit’s chief administration officer.

City officials said businesses, institutions and all residents should look at reducing water consumption to keep their water bills down.

As for property taxes, the finance committee decided not to impose any mill rate increase on residential property owners.

But commercial property owners will face a tax increase of one mill over last year’s rate.

The mill rate is number used to calculate property taxes, based on the assessed value of the property.

One mill is equal to one-tenth of a cent, so the amount of tax payable is calculated by multiplying the value of the property by the mill rate and then dividing the product by 1,000.

This means a business property valued at $200,000 would end up paying $200 more this year than last, due to the one mill tax increase.

Again, government and institutions are taking the biggest hit, with their mill rates rising by 3.21.

A big factor the finance committee considered when drawing up this year’s budget was the recent collective agreement for the city’s unionized workers.

“We had to wait until the collective agreement was ratified in September and this gave us our starting numbers,” Hussey said.

The agreement gave workers wage increases of 2.5 per cent in each of two years.

Mayor Madeleine Redfern said the committee members worked “diligently” to keep spending down but that increases in property taxes and water rates were forced by cost factors outside the city’s control.

The Quilliq Energy Corp. raised their rates by 18.9 per cent in 2011. Another rate increase of up to five per cent is expected some time this year, and the city has adjusted its budget to absorb these costs.

But Redfern said the city council has looked at other places to save money, such as identifying where there is existing debt that can be paid off.

“If we can pay down existing debts, the city will not have to pay the interest on so many outstanding loans,” Redfern said.

For example, one way to do this would be to pay off outstanding money on the building that used to house the city’s dog pound.

The city estimates that could save $100,000 in interest over 12 years.