Abbotsford city council is now examining a property tax increase of 1.72 per cent.

Council gave staff direction to explore the figure during budget debate at its meeting on Monday.

An earlier figure of 1.52 per cent had been proposed but didn't include increases to the historical fee for service contracts the city has with community organizations or a planned transit service expansion.

An additional 5,000 transit hours costing $230,000 to the operating budget are part of the new tax hike being considered - as is a total increase of $45,000 to fee for service contracts the city has with eight community organizations, with MSA Museum Society getting $25,000 of the new funding and Abbotsford Restorative Justice and Advocacy Association getting the other $20,000.

The new figure does not include a request to the city by Ledgeview Golf Club for $250,000 so that the public, nonprofit course will not be forced to shut its doors.

Council directed staff to produce a more detailed report on the Ledgeview situation for future consideration.

The number is also the result of $3 million in reductions to the operating budget, the largest due to cutting transfers to the city's capital reserve.

The capital reserve holds the city's savings dedicated to long-term capital investment projects or any other large future expense.

The new tax figure means council would eliminate a one per cent tax levy that went to supplement the city's strapped capital budget and reduce the existing capital transfer for a total reduction of $1,594,000.

If the practice continues during the entirety of the city's five-year financial plan, Abbotsford's capital reserve will be close to zero by 2016, according to staff.

Councillors John Smith and Henry Braun suggested that staff should be aiming for zero tax increases and that the Abbotsford Police Department could take the brunt of cuts.

Councillors Pat Ross and Dave Loewen said no tax increases weren't practical and the necessary cuts could negatively impact future budgets.

Loewen suggested he was comfortable with increases up to two per cent that were in line with inflation.

The general operating budget is around $167 million and a one per cent property tax increase is equal to $1,094,000 of budget revenue.

The property tax hike would not include any increases associated with water and sewer rates, or school, hospital or library taxes.

BOOZE AND SLOTS

Patrons at Chances Community Gaming Centre on Peardonville Road will be able to have a drink while they play the slot machines.

With the exception of Coun. Simon Gibson, the council voted to grant the gaming facility a primary liquor licence. It is the only community gaming centre in B.C. lacking a licence.

City council will also reconsider its Jan. 23 decision not to push a slots expansion request by Chances forward to a public hearing.

Mayor Bruce Banman opted to use his privilege under the Community Charter to ask council, which had voted 5-4 against the idea, to take a second look at the proposal and let voters express their opinion on the matter.

Chances wants to boost its current 125 slot machines to a maximum number of 300, in increments of 25 to 50 depending on market demand.

Coun. Gibson, who opposes any gambling expansion due to social dangers, expressed his disappoint that council had chosen not to show leadership on the matter.

Upcoming budget dates:

- February 27, 2012: council special budget meeting, financial plan approval, 4 - 5 p.m., City Hall, room 530.

- March 5, 2012: council regular meeting, 2012 budget bylaw adoption, 7 p.m., Matsqui Centennial Auditorium

Rbaker@abbotsfordtimes.com