It’s likely going to be a difficult tax year in 2025, North Cowichan’s CAO Ted Swabey told council members at the committee of the whole meeting on July 9.
The municipality’s five-year financial plan calls for a 4.18 per cent tax increase in 2025, but Teri Vetter, North Cowichan’s financial services director, said in a report that there are many factors that will drive next year's budget which will lead to cost-escalation pressure.
She said negotiations will begin soon on a new contract for North Cowichan’s CUPE workers and, while the implications on the budget are unknown at this time, given inflation pressures, staff expect the new agreement will impact taxation.
Vetter said that an RCMP contract will also soon be renewed by the province and, while the municipality has no input regarding these negotiations, once finalized, the increase in the RCMP members' wages will be passed along to North Cowichan.
She said the implementation of a number of plans adopted by council, including the Strategic Plan, Official Community Plan, Master Transportation Plan, and the Climate Adaptation Strategy, will have budget implications next year, as well as a number of major capital projects, like the replacement of the planned water main feeding North Cowichan’s south end which, at $10 million, is almost double the original estimate.
“We also recognize that the fire-equipment replacement reserve is inadequately funded, and that some fire trucks have exceeded their expected lifespans,” Vetter said.
Vetter said the municipality is just at the beginning of the budget process for 2025, and numerous council and committee meetings on the subject are being planned beginning in November after staff work through the budgetary numbers this summer and fall, with the budget tentatively scheduled to be passed on Feb. 5, 2025.
"Residents and interested or affected parties will be invited to participate in the budget process and encouraged to share feedback during council and committee budget meetings," she said.
"Additionally, a public engagement approach will be developed to inform the public about the budget and to seek feedback, and will include a ConnectNorthCowichan page.
Coun. Chris Istace said he thinks that now is the time for council to set the tone on what they want staff to bring back to them in regards to budget recommendations in the coming months, and to determine if the focus should be primarily on North Cowichan’s capital infrastructure, which gets further outdated every year.
Swabey acknowledged that it will be a difficult budget process for 2025.
“I think that setting a tone of 'we’re not going to go any higher (with the tax increase) than a certain amount' is up to council, but it will be almost impossible if you want to move forward with some of the major issues we see coming down the pike,” he said.
The tax increase in 2024 was 5.18 per cent, and the five-year financial plan calls for a 4.42 per cent tax increase in 2026, 1.86 per cent in 2027 and a 0.83 per cent in 2028.
Coun. Bruce Findlay said, for the record, he prefers the 0.83 per cent increase forecast for 2028 be adopted for 2025.
“I think it’s very important that we look closely at our numbers for next year and remove the nice-to-have items,” he said
“We do have asset management, and we have to pay attention to infrastructure.”