Thursday, April 13, 2017

Council says No to 2.25% mill rate increase tied to snow removal concerns, returns to 1.5% plan

Providing they don't have a change of heart before final approval, the path is in motion for a 1.5 per cent increase to the municipal mill rate this Spring, as Prince Rupert City Council started the process Tuesday night of approval for their Financial plan for 2017.

Council members gathered in a special session Tuesday evening, receiving an updated report from Corinne Bomben, the City's Financial Officer, who made note of two key changes to the original overview of the budget consultation process, changes that had shifted the finance department's mill rate request to 2.25%.

The two factors that made for some of the rethink on the city's budget requirements included a reduction in assessment values by B.C. assessment, primarily on residential homes; while the CFO also noted that the weather of February and March had also knocked some of the city's financial numbers for a bit of twist.

On the snow issues, Ms. Bomben stated that after a heavy snow and ice period of the two months, the city had exhausted the snow removal budget for the year, requiring an additional $100,000 for the city to be prepared should the months of November and December offer up more weather surprises.

You can examine the full report to Council from our preview item of last Friday.

The request for the additional money proved to be an ask that was too much for the majority of Council members, who had no appetite for the additional boost requested of the mill rate.

The follow up discussion was led off by Mayor Brain, who for the most part focused on Prince Rupert as a community still in transition, noting that Council had not put in place a tax increase last year, something which is correct.

However, as helpful as that may have been last year, it should be noted that the city more than likely benefited from increased property assessments last year, even without the need for a mill rate increase.

Mayor Brain led the discussion related to
where the city would set the mill rate at
during a Special Council Session Tuesday
To further the narrative of a need for the 1.5 per cent increase, the Mayor made note that surrounding communities in the Northwest have similar, if not larger tax increases planned for their residents for this year.

While acknowledging that Prince Rupert's residential and business taxes are higher than other levels, he observed that as the city continues through this transition period there is still a need to balance the tax situation in the immediate period.

Mr. Brain also pointed towards a more hopeful future, suggesting that the recent announcement related to development on Watson Island might provide for new revenue for the city in the years ahead.

Councillor Niesh was the first of the Council members to weigh in on the tax issue, first observing his disappointment at the lack of engagement by the public in the budget process, a valid concern when it comes to public interest on council issues, but one that suffered from unfortunate timing.

Those comments may not  have much resonance with the public at the moment, considering the fact that this is a City council that has cancelled two regularly scheduled public sessions out of the six on the list so far this year.

Some of that lack of interest may indicate for Council that the public is perhaps becoming a little jaded with what they see from the Council chambers and the members in it.

Particularly when it comes to a City council that can't be bothered to show up for the scheduled sessions they are paid to attend, nor explain why they decided to cancel them in the first place.

As for the tax issue at hand, while Mr. Niesh did make note of his long held opposition to the City raising taxes prior to his election in 2014; he also quickly added that his two years on council have changed his opinion somewhat on that theme.

Towards that change in thinking, Councillor Niesh then put forward a motion that Council return to the original plan of a 1.5 percent increase. Offering up the first of many wishful thoughts on the night that the proposed Watson Island announcement would provide benefit to the City.

Mr. Niesh's motion was one that Councillor Cunningham quickly seconded, adding his own thoughts and disappointment as to how the nature of how the request for the increase to 2.25 per cent had been introduced.

He too shared Councillor Niesh's hopes that new projects such as the proposal for Watson Island would move forward and bring good things for the city next year, allowing them not to have to nit pick over things anymore.

Councillor Thorkelson sought more background on how the City approaches the snow budget and surplus situations from year to year, suggesting that the City should gamble that the required $100,000 additional dollars requested by the CFO to address potential snow issues in the fall, could be available from surplus at the end of the year.

Ms. Thorkelson didn't quite pursue that theme far enough however, leaving a major question unasked for the most part. As many in the community may wonder what the city did with the snow budget from those years of the past that found no significant levels of snow and ice in the community.

Considering that this February and March were quite unusual compared to many of the years previous, asking for a published account as to what the city does with any unused "snow removal" money from those years might have been helpful to the overall theme and the nature of the request.

When it comes to taxation, Councillor Thorkelson also made note for those around the room that she was the only councillor that had suggested that the city consider a tax increase last year, pointing to this exact situation as what she had in mind as to her concern at that time.

As a compromise, Ms. Thorkelson suggested a smaller increase to the mill rate, to be set at 1.75 percent, though that suggestion did not gain much traction.

Expanding on Councillor Thorkelsons overview,  the Mayor offered up some familiar themes of recent months. Noting that the City needs to look at their strategy related to the Port Cap issues, as well as the Port Edward revenue sharing agreement, observing that if the City can deal with those two elements they all may be having a different discussion at budget time next year.

Councillor Kinney, participating by phone offered up a short review, speaking out against any increase beyond the 1.5 per cent previously proposed.

Even that amount was too much for Councillor Randhawa however, who urged Council to consider no tax increase for this year, noting that the city's residents already have seen increases in recreation fees and utility fees this year, and how an increase at this time would only add to a larger burden for those on fixed incomes.

The Mayor spoke to that concept of holding to no tax increase for this year, with a reminder that the city could not balance the budget without the 1.5 percent increase, and would have to consider service cuts if that were the case.

As well, Mr. Brain made note of the $160,000 in obligations that the city faces this year, including contract obligations to the union that he said need to be taken care of. Though as part of his overview he did not make mention of the number of additions to city staff positions in recent years.

That's an area that some in the community might wish to see Council review a little further, along with some of their other spending plans, should Council members truly wish to reduce their financial request from the public.

As they neared the half hour mark and with all the council members having been heard, except for Councillor Mirau who was absent on the night, Council then voted to move forward with accepting the Financial plan, while holding to the original plan of a 1.5 percent increase to the mill rate.

They will look to adopt that motion at a future City Council session.

A full overview of the discussions from Tuesday's session can be found on our City Council Timeline feature, which expands on some of the themes presented by the Council members.

As well, you can review the night's discussion from the City's Video archive, the Budget consumes the first 28 minutes of the session.

For more background on the City's Budget process see our Budget Archive page here.

More notes on City Council Discussions can be reviewed on our Council archive page.

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