Tuesday, March 31, 2015

City will not make use of Legacy Fund for budget shortfall issues

The City's Financial Officer made a short presentation to Council last week as part of the final public consultation session on the city's budget preparations.

One aspect of Corinne Bomben's overview to Council included an answer to questions raised during the last public session of March 9th.

Last Monday evening, particular attention was directed towards the potential use of Legacy Corporation money to fund the budget shortfall, a proposal that the city is seemingly not inclined to make use of.

Instead it would appear that the City prefers to allocate any Legacy Funding towards staffing requirements and other items related to development of the land in question along Tuck Inlet related to the proposed LNG development for the area.

As part of her presentation she suggested that using Legacy Funding to offset operational increases would have as she put it "dire consequences".

Explaining that should the major projects proposed for the region not go ahead, the Legacy funds  would become depleted over the course of an eight year timeline.

Should the city use the Legacy Fund during that time to keep mill rate increases to zero until the fund is exhausted, the result would then be a required 23 per cent increase to the mill rate to fund operational purposes at the end of that period.

She outlined that the city believes that the current method of an incremental approach to taxation that the city is using towards operational costs makes more sense. As it allows for smoother rate changes and keeps pace with normal increases such as contractual and statutory obligations as well as to normal increases to supplies and services.

She also offered up an explanation on the process of determining the mill rate for taxation, making note of the current proposal of a 1.9 percent increase for 2015.

The Mayor further expanded on the proposed use of the Legacy Fund revenues later in the council session, as part of an answer to Denis Rowse, a city resident who had posed a question related to the city's plans to increase taxes once again.

The Mayor outlined some of the challenges that the city is facing when it comes to accessing tax revenues on the industrial side of things, as well he offered up a snapshot of the City's plans when it comes to uses for the Legacy Fund revenue stream.

More background on issues related to the Legacy Fund discussion can be found from our Council Timeline from March 23rd.

Ms. Bomben's presentation to Council can be found from the City's Video Archive, the presentation runs until the five minute mark.

Mayor Brain's thoughts on the Legacy Corporation can be found at the 30 minute mark.

For more items related to City Council discussions see our archive page.

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