In an unlikely scenario city staff are asking council to approve a 5.6 per cent property tax increase across the board and force the city to pay over half a million dollars in reserves to balance the budget. The 2025 property tax bylaw will seek council approval April 7.--NEWS FILE PHOTO
bmiller@medicinehatnews.com
City committee members heard a presentation on a proposed increase of 5.6 per cent to the municipal property tax rate for the median taxpayer in 2025 on Thursday that will now seek council approval for finalization on April 7.
This year, city staff say they are recommending council to approve the municipal property tax bylaw that would result in the city having to pay $520,000 for a revenue shortfall that will be funded through reserves.
City council last December approved a 5.6 per cent municipal property tax increase as part of adopting the 2025-26 budget.
If approved, Hatters with a residential property of worth approximately $315,000 will see their property taxes increase by approximately $10 per month this year, and an additional $10 per month in 2026.
Residential utility customers will also see a one per cent increase in rates, while commercial rates may go up five per cent and four per cent for industrial customers.
“When we set tax rates, our primary focus is to mitigate the tax impact to property owners,” explained Sue Sterkenburg, manager and city assessor. “We want to ensure that the distribution of taxes is fair, equitable and transparent.”
Staff provided corporate services committee members five tax scenarios that take into account the market value charges and the assessment growth changes to analyze the impacts to tax revenue distribution.
The scenario city staff are asking council to approve would increase the municipal tax rate for all property classes and require the city to pay $520,000 for reserves to balance the budget.
“The reason we’re recommending this scenario is that we believe this provides a fair distribution of taxes across all tax classes,” said Sterkenburg. “The municipal rate increase is the same at 5.6 per cent for single family, multi family and non residential, and it’s the same as the property tax revenue that we had included in the budget.”
Due to assessment losses that occurred in 2024 that were higher than anticipated, city staff say they recommend the approval of a tax increase scenario that requires drawing funding from reserves.
“This is not normally what we would recommend,” said Sterkenburg, who explained the city is not anticipating any larger losses heading into 2026. “So therefore, we’re just requesting this one-time funding of the revenue shortfall through the city reserves.”
Coun. Robert Dumanowski says this scenario is somewhat of an anomaly, however it allows council to to keep its promise to taxpayers from last December.
“I think we owe it to the public to keep whole what we had intended,” said Dunanowski. “The principal of the matter would be keep it whole and find a way to fulfil that shortfall.
“It’s not difficult for us to take it out of general revenues, but it’s not how we normally run business here. In saying that there’s not an error at play here, this is just real life.”
Coun. Cassi Hider said it’s important council remains fair and transparent when setting taxes.
The deadline to appeal individual assessment amounts is May 13.
Taxes are due June 30.
