After the Cowichan Valley Regional District’s large 11.49 per cent tax increase this year, the board is looking to try to keep the tax increase as low as possible in 2024.
At its meeting on June 14, the board decided to mandate that the CVRD’s many services and departments limit their budget increases to 3.5 per cent in 2024, and they will be required to submit a business case to the board if they feel an increase higher than that is justified.
Chief financial officer Natalie Wehner said in a report that there were no mandated caps on spending increases in the 2023 budget, and that was both beneficial and challenging for staff.
“While it allowed the opportunity to increase budgets for inflation where required, this approach was also challenging as staff had no direction on what the board was hoping to achieve in the 2023 budget,” she said.
RELATED STORY: CVRD PROPERTY OWNERS WILL SEE AN AVERAGE 11.49% TAX INCREASE IN 2023
But it’s unlikely the tax increase in 2024 will be as low as 3.5 per cent as other costs will come into play as the budget is prepared.
The 3.5 per cent increase mandate for the CVRD’s core services only takes into consideration the union contract increase for employees and not other economic factors.
They include the 2.5 per cent increase that is required to cover the use of operating reserves in 2023, and the increasing costs of the CVRD’s new regional recreation funding model, which accounted for 4.7 per cent of the tax increase in 2023, among other financial considerations.
But many CVRD directors feel that limiting the core services to 3.5 per cent increases in their budgets is good first step to keep tax increases down in 2024.
Ladysmith Mayor Aaron Stone said at the committee of the whole meeting on May 10, at which the issue was discussed, that board members have some very difficult discussions ahead of them as the 2024 budget is being built.
“We should approach this in a way that we’re working collaboratively together as staff and board members to try and find those [financial] efficiencies and make those difficult decisions around service delivery and try to achieve numbers that will get us back to, if not fiscal austerity, at least reasonable restraint,” he said.
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“I’m feeling the pressure and I’m hearing it more and more from residents.”
Cobble Hill director Mike Wilson acknowledged that the tax increase will probably be much higher than 3.5 per cent once all the other costs and expenses are added in.
But he said it’s a good start and if the CVRD has to cut services, that’s okay.
“I’ve been asking for a service review for many years as we seem to keep making increases and additions to the services we provide and we’re now getting to the point where this is unsustainable,” Wilson said.
“We can’t increase all the time and we can’t be all things to all people. Maybe this is the year that we actually start sharpening our pencils and getting our erasers out.”
RELATED STORY: COWICHAN-WIDE REFERENDUM ON FUNDING FOR RECREATIONAL FACILITIES PASSES
North Cowichan Mayor Rob Douglas said he’s also concerned about increasing cost pressures that are impacting residents across the Cowichan Valley.
He said his experience in the CVRD and North Cowichan is that when you start at a particular number, you quite often arrive at something much higher.
“We may well end up at six per cent in the end [the cost increase for each service that was recommended by staff] but my preference is to start at something lower than that and look to the possibility of building up from there recognizing the fact that we do have regional recreation, transit and library board as well that will likely bump the number up much higher regardless.”
robert.barron@cowichanvalleycitizen.com
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