Residents got an early glimpse at the municipality’s financial five-year plan earlier this week.
Chief financial officer Kristen Watson presented the course Bowen could expect to chart economically over the next half-decade. But, she was sure to note the draft is in its early stages, and likely to undergo a series of changes before its official submission in May.
The number home owners are most likely focused on is the property tax, which starts negotiations set for a rise of 13.3 per cent this year. This jump from last year’s budget – which settled on a 7.8 per cent increase – wasn’t unexpected. Reducing the property tax from double to single digits last year came with an estimate that the 2023 jump would be at least 12 per cent.
Using an average Bowen home value of $1,486,000, this means the average payment will be $347. This number will drop a bit though due to non-market changes – new construction plus changes to property status. The $25.7 million expected to be added through this method will effectively make the property tax increase 12.5 per cent, for an average payment of $327.
The double digit property tax hike is predicted to drop dramatically in the years to come: 2024’s increase is expected at 5.8 per cent, with the 2025-27 rises estimated at 3.4, 6.8, and 3.5 per cent respectively.
In addition to deferments from last year’s budget, one of the reasons for the 13.3 per cent hike in 2023 are substantial costs due on capital projects, with a total $15,867,235 going toward these projects this year. The majority of this - $12,663,896 – is for the Community Centre, with other significant, albeit much lower, expenses budgeted for the Multi-Use Path, the future On-Island Composting facility, and roads and infrastructure work.
The largest capital expense following this year is expected to be $3.5 million to upgrade the municipal works yard in 2025. That year also includes spending $395,000 for a new fire truck to replace Engine 32. Capital costs will exceed at least $6 million in two years, which accounts for the 2026 property tax raise of 6.8 per cent being higher than surrounding years.
There may be additional capital work on the horizon though. Engineering director Patrick Graham has indicated a pair of projects he’d like considered – replacement of the Carter Road bridge at an approximate cost of $850,000, and upgrades to Woods Road costing around $1 million. Graham will present the plans for both to council at their March 27 meeting.
Aside from capital projects, the other main reason for this year’s property tax rise is an increase in debts which are coming due. This includes $4 million for the Community Centre and $3 million for the new Fire Hall. Total debt servicing payments of $662,648 this year account for essentially half of the average $347 property tax payment, at $177.
Watson said the Community Centre is expected to open in October, but is still relying on financial contributions to see it reach the $18.7 million final cost finish line. The CFO says the municipality is expecting a $732,000 grant from the federal Canada Cultural Spaces Fund, and for a minimum of $936,000 to be gathered through the current fundraising campaign. The facility will require about 2.75 new full-time equivalent staff to hire a facility manager and custodial crew.
The debt will be a number to keep an eye on going forward as Bowen has reached the 1/3 mark of the provincial liability servicing limit. Planned upcoming loans, such as $3.5 million for works yard fixes, $3.1 million for Bluewater Park water upgrades, and $6 million for Phase 2 of the Snug Cove Wastewater Treatment Plant project will potentially raise Bowen’s borrowing to half or close to 2/3 of the allotted amount. Watson said the municipality should start budgeting for these future costs now.
She also recommended the creation of a new reserve fund for police services. While the cost for local RCMP is currently covered by the province, once Bowen hits a permanent population of 5,000 the municipality will have to bear some of the price tag. The fund would begin next year with a $50,000 contribution, rising to $150,000 by 2027.
The population answer won’t be revealed until the 2026 census numbers are counted. A spike similar to what Bowen saw between 2016-21 – where the island grew 15.7 per cent to reach the current total of 4,256 – would bring the number of people very close to 5,000 in three years time. Watson said it’s important to be prepared with some reserves for policing in case Bowen ends up exceeding growth expectations again.
The draft five-year plan is now in the public engagement stage, with a pair of online open houses scheduled for Monday, March 20 at 6 pm, and Thursday, March 30 at 2 pm. It will be discussed by council again at their March 27 meeting before public feedback is discussed April 11.
Three readings are expected when council meets April 24, followed by adoption of the budget May 8 in advance of the May 15 submission deadline.