Dieppe facing 5 years of tax hikes, major capital spending

Dieppe residents are expected to see five consecutive tax hikes as the city eyes major capital spending hikes citizens can afford and will benefit from, according to Mayor Yvon Lapierre.

The 2018 budget includes a one-cent increase to the municipal tax rate, which rises to $1.6295 per $100 of assessed value. The city is also forecasting further rate increases of a penny each year until 2022, with the exception of a three-cent jump in 2020.

The forecast comes after tax increases in the previous two years.

Lapierre said it's a "prudent" measure considering the large amount of spending earmarked for the next five years. He said the city's forecast shows about $68 million in capital spending for the general and utility budgets over that time frame.

"We felt it was reasonable under the circumstances," Lapierre said of the tax increase, adding the forecast can be adjusted.

"A lot of the spending in the capital [budgets] is to continue to improve road conditions and continue to improve the community and provide excellent services to our citizens."

Major projects

Some of the big-ticket spending is required in the immediate future, he said. That includes replacing the Centennial Arena, construction of a new RCMP station and hosting the 2021 Francophone Games, an international event held every four years.

The mayor said investing in roads and major projects is required to service a growing community. The latest census recorded Dieppe's population at 25,384, a 36.7 per cent increase from 2006.

"Revenues comes from the growth, but also expectations," he said.

The city will also create new trails and increase transit operating hours by 2,000 hours in 2018.

Heavy debt

The city found itself in a deep financial hole in the past decade with a debt ratio higher than 20 per cent and tens of millions worth of debt after years of rampant spending. Lapierre, who served as mayor from 1998 to 2005 before being re-elected in 2012 and again in 2016, has been often criticized for the city's spending practices.

Lapierre said a property tax increase will help reduce the debt load and create reserves for future projects. He said the city will limit its annual borrowing to $1.5 million, according to the financial plan that's expected to be adoptedin January.

City council approved general and utility operating budgets totalling $66.8 million on Dec. 11 a $600,000 increase in expenses from the previous year.

Water and sewer bills are set to increase by $12 to $928 as well.

Acceptable increase

Coun. Ted Gaudet said it's an acceptable tax increase with growth in both the commercial and residential sectors of the city.

"The idea of raising taxes as being a 'no-no'... it all depends if you're in a good comfort level with respect to your finances, you may be able to do that," he said.

Gaudet said Dieppe's finances are in good standing with a debt ratio near 15 per cent. He said some heavy debt burdens will come off the city's books in 2021.

"Anywhere between 15 and 10 is per cent is a comfortable level for a municipality like ours," he said. "If we get our debt level way up into the 20s, we have trouble."