City of Montreal - Arr. de LaSalle

City of Montreal - Arr. de LaSalle

November 02, 2006 16:36 ET

LaSalle Adopts its Budget for 2007: Local Tax in 2007 and a Budget Focusing on Proximity Services

MONTREAL, QUEBEC--(CCNMatthews - Nov. 2, 2006) - LaSalle Mayor Manon Barbe submitted the Borough's budget on Thursday, October 26. Supported by her Borough Council, she tabled a budget of $44.33 million.

Report on 2006

The Mayor mentioned, as a reminder, that for the 2006 budget, her Council had opted not to pass on to LaSalle residents the burden of the various increases (gasoline, electricity, snow clearance and garbage collection contracts, etc.) that the Borough had to face. Instead, it chose to take $3.1 million from the Borough's surplus and not to levy any local taxes, as the neighbouring boroughs of Lachine and Verdun were doing. It must not be forgotten that the average LaSalle homeowner pays 11% less property tax than he did 4 years ago, although everything is on the rise, including property values. Council had nevertheless mentioned, at the time, that an adjustment would be necessary in 2007.

2007 situation

After drawing up the balance sheet of all the increases and additional needs that the Borough had to face in 2007, LaSalle is running into a shortfall of $6 million. The breakdown of this shortfall is as follows: $586,246 in increases relating to human resources; a $716,000 hike in the infrastructure rehabilitation budget, recurrent demands of $1.6 million, a $653,000 increase in the snow clearance contract, a rise of $966,100 in the garbage collection contract, and $595,500 more for other contracts, as well as an increase of $516,200 for energy and raw materials. In addition to the $6 million, there are expenses that the Borough has been postponing for several years and can no longer do so-that is, those related to maintenance of the Borough's building inventory and its infrastructures.

In view of these findings, LaSalle could no longer postpone certain matters. The annually invested $350,000-taken from its allowance-for building inventory maintenance is no longer sufficient. LaSalle must increase this amount to $1 million in order to prevent its buildings from falling into premature disrepair, which would give rise to a discrepancy of $650,000 that it has to offset. This amount will be specifically allotted to the maintenance of our buildings.

Road repair: an urgent priority

LaSalle has traditionally invested $1.2 million annually in maintaining streets and sidewalks; however, this amount has been reduced over the years. Nevertheless, the findings of an examination of the condition of the streets and sidewalks are clear: the amounts of money invested are no longer sufficient. Almost all of LaSalle's streets were built in the fifties and sixties, and in contrast to several streets in the three older neighbourhoods that the Borough rehabilitated in the past few years, these will be in need of repairs and rehabilitation all at the same time. LaSalle must therefore devote $716,000 of the $6 million to carry out various roadwork, but that won't be enough. LaSalle will also have to allocate an additional $1.5 million, which will be strictly earmarked for road repairs. And lastly, it will have to devote a large part of the capital expenditure program to infrastructure rehabilitation.

Rationalization exercises

Since the summer, Ville de Montreal has undertaken a rationalization exercise called RASOP. LaSalle had set up a rationalization committee of its own and this committee's proceedings were carried out from January to March 2006. Short-term savings have therefore already been achieved. Those proposed for RASOP will have impacts over the medium term instead. Nonetheless, LaSalle will demand that its Administration further reduce certain costs and it will strive to adopt new methods and procedures. In addition, at the time of the negotiation of the 17 items in the blue-collar workers' labour contract, which will expire next August, the Borough will ask them to help it more in reorganizing their work.

Budget observations

LaSalle will receive an allowance of $36,186,900, equal to that of 2006. The increases in costs and the cutbacks that it will have to face come to $6 million. LaSalle has already made rationalization efforts. It must moreover catch up on the maintenance of its building inventory and speed up the reconstruction of its infrastructures and the resurfacing of its roads. The borough of LaSalle therefore has no alternative but to levy local taxes in order to meet its obligations and continue providing LaSalle residents with proximity services.

In short, these new taxes will make it possible for LaSalle to face the increases related to labour contracts, the major hikes in the snow clearance and garbage collection contracts as well as reinstatement of the budget for reconstruction of infrastructures, building maintenance and recurrent demands. These demands relate to projects that Council re-evaluates each year: the purchase of books at the library; the presence of monitors at the parks and at L'Exit youth centre; Velo-Secur patrollers, maintenance and surveillance of Des Rapides park by Heritage Laurentien; urban security, traffic and parking interventions; maintenance of the water supply and sewage systems; snow and cleanliness; tree planting and pruning as well as bus shelter purchases.

2007 budget

The Borough's expenditure budget in 2006 totalled $36,186,900, whereas the non-taxation revenue budget came to $1,669,500. Nevertheless, to meet its obligations, LaSalle will be seeking to obtain $8.1 million by levying a local tax of $6 million in order to face the increases related to human resources, reinstatement of the infrastructures budget and recurrent demands; increases in the cost of contracts-including those for snow clearance and garbage collection; increases in the costs of energy and raw materials, by levying a specific tax of $1.5 million for streets and sidewalks; and also a tax of $650,000 for maintenance of buildings, for total expenditures of $44,336,900.

Capital expenditure program for 2007-2008-2009

The 2007 capital expenditure program provides for expenditures of $4 million, with the following breakdown: $1 million for approaches to the Latour bridge, $1.25 million for road repairs, $750,000 for automotive equipment, $456,000 for parks and green space, $400,000 for street lighting and $150,000 for upgrading the computer system.

2007, a cut-off year

Last September, Montreal publicly announced its new assessment roll, which contains the values on which homeowners will be taxed over the next years.

In LaSalle, there was a huge rise of 57% in residential sector values, well above the Montreal average of 47.4%. The variation of taxable values is 55.4% for single-family dwellings, 46.5% for condos, 62.7% for duplexes and 50.2% for triplexes.

After having evaluated the budget obligations and cost increases that LaSalle must face and in order to find out what the impact would be of the change in policy that the Borough must make in order to cope with the expenses over the coming years, the Borough made projections of what LaSalle owners' tax bill might amount to. For these projections, it took into account that in order to reduce the impact of the substantial increase in real estate, the increase in the value of properties, as reflected in the assessment roll for 2007-2009 could be staggered over a four-year period.

The average value of a single-family dwelling has increased 97% since 2001, from $133,509 to $263,236. The difference between the 2001 tax bill and the one estimated for 2007, with staggering over a four-year period, would be 12%, an average increase of 2% per year since 2001, rising from $2,203 to $2,467.

For condos, the average value has increased 63% between 2001 and 2007, from $71,570 to $116,363. With the increase in values staggered over four years, the tax bill would be subject to an average drop of 1.7% since 2001, from $1,181 to $1,161.

For a duplex, the value between 2001 and 2007 has climbed 124%, from $136,855 to $305,994. With the increase staggered over four years, the difference between the 2001 tax bill and the one projected for 2007 is 15.2%-an average increase of 2.5% annually since 2001, from $2,258 to $2,602.

For a triplex, the value between 2001 and 2007 has risen 121%, from $167,977 to $371,850. With four-year staggering of the increase, the difference between the 2001 tax bill and the one estimated for 2007 is 13.4%, or an average increase of 2.23% annually since 2001, from $2,772 to $3,143.

For a number of years, the LaSalle Administration has absorbed budget increases that should have been reflected on the tax bill. Today, the Borough's budget obligations require a change of policy. Starting now, it must further invest in reconstructing and repairing infrastructures and maintaaining its building inventory.

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