Draft Budget and Tax Rates Provided to Council for 2025

Type(s)
News Release

Contract Increases, Debt and Cost Escalations Primary Drivers for the 2025 Proposed Increase of 6.4%

PRINCE RUPERT, OCTOBER 22nd, 2024 – The City of Prince Rupert’s Draft 2025-2029 Budget was presented at a Special Meeting last night, and is now available for the public to view. Public consultations have also been scheduled for next Monday, October 28th, and November 12th at City Hall. Both consultations will be held at 7 pm. 

The 2025 budget has continued to be driven by contractual and benefit increases for employees, debt, equipment requirements, cost escalations, and external contracts with the RCMP and BC Transit. The draft tax rate is provided to the community to support financial preparedness, based on current available information, however final rates will not be determined until the Spring after final BC Assessment values are known.

A comprehensive breakdown of the 6.4% increase to the tax rate proposed in the Draft 2025 Budget is below:

  • Labour Contractual/Benefit Increases – 2.6%
  • Debt Payments, Energy/Supplies increases – 0.90%
  • Operational Equipment – 0.40%
  • Transfer to Capital Reserves/Asset Management – 0.50%
  • Policing Contract increase – 1.40%
  • Transit Contract Increase – 0.60%

Discretionary expenses like additional funding through community enhancement grants (0.49%), repairs to Kwinitsa Station (0.31%), a position for a Community Safety Officer (0.41%), support for an Indigenous Relations Committee Action Plan (0.06%), and Boiler designs for the Lester Centre (0.16%), were also presented to Council as  optional increases to the proposed rate.

Unlike other levels of Government, municipalities are not permitted to operate in a deficit, so each year we must balance the budget. After all other sources of revenue are accounted for, the above costs account for a 6.4% draft increase to the tax rate to make up the difference. This is what is proposed in order to maintain services at their existing levels, and represents an increase of $129 to the average homeowner for 2025, based on 2024 assessed values.

In addition the 6.4% increase to the property tax rate, Council will also be considering new Utility Fee bylaws, with fee adjustments proposed to service the City’s debt portion of funding that is being directed to critical water and sewer renewal. In total, if adopted as proposed, these fee changes will lead to an $145.25 increase to overall utility rates after the 10% early pay discount is applied. 

Rate impacts are similar to what other communities throughout BC and in the North are facing, and all efforts have been made to trim expenses not covered in other ways to reduce the tax impact. Council will now deliberate and look to the public for feedback. A final decision on the 5 Year Financial Plan will not be made until Council has the opportunity to receive public input. (See end of release for details on consultations as well as opportunity to provide input through our budget simulation software.)

The Budget in Context

As was noted in the presentation of last year’s budget, although the tax increase is higher than desirable, the 2025 Budget includes significant capital works planned for the 2025-2029 Financial Plan. With over $149 Million in capital investment planned for 2025 alone.  There is no increase to taxes associated with this capital investment.  In addition to grants and borrowing, this has been in part achieved through dividends from Prince Rupert Legacy Inc. – revenue that has enabled several important projects to be completed with no impact to tax/rate payers. For 2025, dividends are proposed to offset capital and special projects by $420,000, representing an otherwise 1.64% potential tax increase if this funding wasn’t available for this purpose. Additionally, Legacy’s support for water capital infrastructure this year has offset water utility fees by $350,000, or a 7.17% increase. It has also provided $750,000 towards annual debt payments on capital borrowing for the Woodworth Dam and the McBride street watermain failure, resulting in a 15.6% savings in utility fees overall. 

As announced in the spring, Council and staff have also successfully advocated for an unprecedented $65 million in Provincial funding and $78 million in Federal funding towards replacing our water distribution infrastructure, and have approved borrowing for an additional $45 Million to design and replace the sewer lines at the same time (a Federal funding requirement). Proposed utility fees for 2025 through 2028 take into account the debt repayment associated with this contributory funding.  This Fall and Winter, we are starting on our priority replacement project for 26 km of the highest likelihood and consequence of failure pipes. More information on that work is here.

Opportunities for Input

As noted above, there are two public feedback sessions planned for October 28th and November 12th at 7 pm, held in Council Chambers, City Hall at 424 3rd Avenue West. The public also has the added opportunity to directly interact with and understand the proposed budget via our online budget simulation tool, which is now live via engage.princerupert.ca/budget2025. Written comments can also be directed to finance@princerupert.ca on or before November 15th, 2024. All feedback will be submitted to Council for consideration as part of their decision-making processes.

The Draft 2025-2029 Five-Year Financial Plan can be viewed here.

The first Public Budget Presentation can be viewed here. 

 

MEDIA CONTACT: 
Veronika Stewart, Manager of Communications, Engagement and Social Development
Office: (250) 627 0976
Cell: (778) 884 6285
Email: veronika.stewart@princerupert.ca