Thursday, May 2, 2013

Council takes its budget quandary to the public for one more session

This weeks Special session of Council provided for one answer to the growing puzzle of Civic Budget concerns, as City Council voted by a slim majority to put in place a three percent cut across the Board to all City departments.

The vote which saw a split on Council, found Councillors Ashley, Kinney and Garon on the affirmative side of the vote to put in place the cuts, while Councillors Thorkelson, Rice and Carlick-Pearson cast their votes against the plan. Leaving Mayor Jack Mussallem who was participating in the session by telephone, to make the deciding vote. Casting his vote as a reluctant yes, as he put it to Council.

With that vote recorded, the City embarked on the cost reduction plan of budget cuts to many departments, with the Public Works Department expected to bear the brunt of the cost cutting, a situation that will apparently lead to at least 6.5 positions eliminated, with layoff notices to be issued shortly.

Northern View-- Council needs to take responsibility (e edition May 1, page 4)
Northern View-- Prince Rupert City Council cuts $462,000 from operations budget
CFTK-- Prince Rupert Seeks City Manager (video)
CFTK-- Prince Rupert Budget Cuts and Public Forum (video)
CFTK-- Prince Rupert Council Chops Ops Budget
CFTK-- Prince Rupert Budget Hit (video)
CFTK-- Prince Rupert Facing Budget Crisis After CityWest Fails to Deliver Dividend

The decision to implement those cutbacks proved controversial, introduced as it was late in the Budget process. Councillor Thorkelson did all of the talking on behalf of the No budget cuts side of council,  spending much time from the Monday session offering up her thoughts on the City's financial situation.

The Councillor took some offence at recent media suggestions and speculation in the community, that the City is in Financial crisis or that Finances are a mess, pointing towards past budget years as an example of the City's ability to work within its budget parameters.

She also had many concerns over the nature of the City's ability to gain revenues. A topic of particular interest of late it seems is the nature of the money that the Port provides to the City through the current payment in lieu system in place. She suggests that should that situation be changed to better provide revenues to the City and if CityWest again delivers dividends, then the budget troubles of today would not be an issue to deal with.

Or as she put it to council,  she was gambling that "the budget would be sustainable next year, with CityWest paying a dividend and the Port paying what the Port should pay".

On the topic of the budget cuts voted on during Monday's session, Councillor Thorkelson had many questions for Councillor Ashley, who was acting as Chair of the meeting, inquiring as to what she hoped to achieve with the cutting to the department budgets.

Councillor Ashley expressed her concerns over the sustainability of the Civic budget moving forward and that she was looking to provide a cushion for next year, which she believes will be an equally challenging situation for the City. Many of her thoughts were echoed by Councillor Garon, who also introduced a separate motion, one that would see the City hold the line on taxation, a motion that calls for no tax increases for this year, a topic which was left to be tabled for the next council session.

You can review many of Council's talking points through our City Council Timeline, which provides the Coles Notes version of council, tied into their Video Archive of the night's events.

Before that next Council session takes place however, Council will seek the input of the public one more time, with a  7 PM Public forum scheduled for Wednesday, May 8th at the Jim Ciccone Civic Centre.

At that time, City Staff will provide taxpayers and interested citizens with their recommendations to council, which could include at least a 2 per cent tax increase, reduction in the paving budget for the year ahead and perhaps the need to move some money from the operating surplus.

Those and any other suggestions will be outlined at the Public Forum, after which the public will be able to provide their input and offer up their own thoughts on how the City should best approach it's financial situation this year.

The City has found itself hit by a double whammy late in the Budget Process, with the City's Financial Officer Dan Rodin outlining a few weeks back that the City will receive less money on assessments of industrial waterfront property this year, partially owing to the closure of two high profile industries in the community, a fish plant and a pellet plant on Ridley Island.

Council also heard word that CityWest will not be delivering a dividend this year, a revelation that has already made for some public comment, in particular at the most recent session of Council, where two citizens offered up their thoughts on the financial setback that CityWest delivered to Council.

The Mayor recently outlined some thoughts to the Northern View on that topic of the CityWest dividend, offering up the optimistic forecast that he is bullish on the local communications company, owing to potential growth in Terrace and Kitimat.

In the course of that interview with Martina Perry, the weekly paper's reporter, the Mayor offered up that the City can't force CityWest to pay a dividend,  according to the Mayor, the only option the city has is to request a dividend.

As the Mayor describes the scenario in play, it's up to the CityWest Mangers and Board to determine how they decide to spend their money, whether it be on other things, or to allow for a dividend.

Northern View-- CityWest will pay out: Mayor (e edition May 1, pages 1 and 2)

All in all, a rather confusing bit of arithmetic for most of us to try and wrap our heads around. Considering that the with the City as the sole shareholder, at the end of the day, one would think that it's the shareholders money that we're all talking about.

We imagine that those soon to be laid off City Workers (shareholders that they are) may have a few questions of their council on that theme on Wednesday, considering that their fate has now been partially tied into that missing dividend from CityWest.

They might wonder aloud, just how CityWest can deny the City it's anticipated dividend, while at the same time hiring on staff for their Terrace and Kitimat operations.

All of which makes for a rather interesting situation, where a Prince Rupert based company that is owned by the City, is creating employment in other Communities. While at the same time, the City of Prince Rupert is reducing employment among those CityWest shareholders (taxpayers) on the Civic employee roll call.

That may make for a few uncomfortable moments, should the topic become a talking point on Wednesday.

Once Council has received the feedback from its taxpayers, they will then meet in two more sessions to hammer out the final details of their budget for 2013, provide the votes on the necessary bylaws with the required final readings.

They can then concentrate on their next immediate concern, that of finding replacements for the departed City Manager and the soon to be departing City Financial Officer.

Two positions that need to be filled rather quickly, should the City have any desires to bring their new hires up to speed on the financial plans ahead.  A task that will certainly prove challenging in the short term for those that the City selects to guide their civic vision into the future.

You can review some of our other items on the current Budget Debate at Council from our Archives.

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