‘Challenging’ budget raises taxes in Steinbach

Describing this year’s budget as “uniquely challenging”, Coun. Michael Zwaagstra made the motion to approve a $43.1 million Steinbach budget on Tuesday.

Senior manager of finance, Brian Hrehirchuk presented the budget which will include no mill rate increase but will see taxes skyrocket thanks to an average city wide assessment increase of 14.9 percent.

That means the amount of taxes collected will also rise by 14.9 percent, with about four percent of that due to new builds, and the remaining 11 percent on existing homes and businesses.

That means the average dwelling market value in Steinbach has gone up from $225,000 to $250,000.

A home valued at the average assessment will pay annual city property taxes of $1,620.

The budget includes an average three percent increase to utility rates, 4.5 percent increase to garbage collection, a 2.5 percent fee increase for land use applications and a five percent increase for permits.

Debt is on the rise for the city as well, with debt payment up $1.35 million from last year.

The city will see $13.25 million of new debt while they only retire $2.6 million.

Debts include $5 million for the Southeast Event Centre construction, $3.5 million for Loewen Boulevard and Highway 12 intersection, $2 million for a ladder truck for the Steinbach Fire Department and $2.75 million for force main twinning.

A total of $3.1 million including $443,000 in interest will be paid out this year representing 13.5 percent of the total city tax rate.

Councillors unanimously supported the budget, but suggested they weren’t pleased with raising taxes.

Zwaagstra walked the rest of council and the members of the public in the gallery through the large expenditures, explaining how much they were spending on things like the Loewen Boulevard intersection, new fire truck, and force main twinning.

“What this does tell us is that the old maxim that growth pays for itself is not true,” he said. “Because obviously if the city was not growing, we wouldn’t be having to do a lot of these things.”

He also referred to an increase in RCMP costs of $400,000, saying that is not a number the city can control. The increase is due to negotiations between the RCMP and the federal government. Steinbach will continue to have 18 officers.

He explained that reserve funds have also been depleted.

“We have fewer resources now than we did a couple of years ago and that’s because we made tough choices when the event centre cost went up,” he said.

Zwaagstra defended the city’s policy of paying off loans over five years, noting a lower interest rate.

“We could borrow over 10, 15 or even 20 years, but here is the harsh reality,” he said. “If we do that, we can save money in the short term right now in this particular budget, but taxpayers will pay more for those same projects in the overall term.”

He said the $10 million of new borrowing is necessary.

“It is a challenging budget, but I believe it’s the right way forward,” he said.

Coun. Susan Penner seconded the motion, saying council did not take this tax increase lightly.

“There is no frivolous spending in this budget,” she said.

With increased construction costs and needs of a growing city, Penner described it as “a new normal”.

“We genuinely believe this is necessary,” she said.

She did voice doubts regarding the annual grant to the Steinbach Chamber of Commerce. Based on a 0.5 mills business tax, the city forwards the money annually.

But because of growth that amount changes every year, this year to $225,000. Penner told council that other chambers are not supported in this way by municipalities, comparing it to Winkler who supplies a $65,000 grant.

That prompted Mayor Earl Funk to ask administration to look into the funding.

The city also supplied grants to Jake Epp Library ($389,880), Steinbach Arts Council ($155,400), accessible transit ($105,000), Summer in the City ($65,000), Mennonite Heritage Village ($52,500), STARS ($18,000), and Headway ($8,000).

Coun. Damian Penner also expressed his support for the budget, recognizing it was a steep tax increase.

“It is unfortunate,” he said. “I’m not happy with it.”

He added he’s not happy with inflationary increases that people are personally experiencing as well.

Mayor Earl Funk said he doesn’t like tax increases but said it was necessary.

“Even though there is an increase, things are tight all over,” he said. “In every department they’re tight.”

The capital program for this year is $36.6 million including funds for infrastructure renewal, the event centre completion, force main twinning and equipment requirement.

Projections for 2026 see that cut in half with $18.2 million planned to be spent on infrastructure renewal and equipment replacement.

However, that number increases sharply for 2027 and 2028 with projections of $58.2 million and $56.5 million respectively for among other things a lagoon upgrade and operations shop.