That as the city's elected officials received one final short update from CFO Corrine Bomben and then later in the evening charted a course to a 3.63 percent tax increase for 2022.
Update: the City added the Video of the Monday Council session to their You Tube archive late Friday afternoon.
The final stage of a one month budget process began in the Committee of the Whole session, as the city's top financial official provided one brief overview of where Council was at in the Budget process, along with one additional expense for the Councillors to consider prior to their vote on approval on the financial plan for the year ahead.
"There's been one item added to the Budget since March 14 and that is to the new landfill site. The change is in respect to weather delays and design changes necessary to complete the cell. This additional cost is $850,000. Staff proposed funding this change with the Northern Capital and Planning Grant Reserve which can be used for capital projects. The use of this reserve means no current year cost impact to users" -- CFO Corinne Bomben with one final addition to the 2022 Budget allocations.
The Council members would pick up the topic of the Budget as part of their Regular Council session later in the evening, engaged in an expansive discussion that found most of them in lock step when it comes to the need for the required 3.63 percent tax increase at this time, many of the councillors making note of the last seven years of zero or reduced tax increases during that period of time.
Only Councillor Gurvinder Randhawa was against the plan for the 3.63 percent increase, he noted of the still fresh burdens of COVID on residents as well as the increases to both utility taxes and recreation fees in recent years.
He instead opined that the Council should use money from Legacy Fund towards reducing that burden on residents this year.
"So we've already increased three percent on the utility bill just three months ago, five percent on recreation fees so I think people are already struggling with COVID, not many people have jobs, home taxes will be more burden on them. All these years our taxpayers they supported Watson Island and now these last three years ... we started making money on that and we have funds available in the Legacy Fund from there.
So my recommendation is that like we can use that money to balance this budget and don't put any extra burden on the taxpayers. And for next year we should be looking for more industry for Watson Island ... to get even more revenue from those places and we should give break to taxpayers because they are already paying so many much taxes from last many years, so my recommendation, I'm not in favour of increasing any tax now, my recommendation is to balance from the Legacy fund ... now is the time to give a break" -- Councillor Gurvinder Randhawa
The prospect of using the City's Legacy fund and use of revenue from Watson Island for such a purpose however brought a rally of the remaining Councillors, all of whom noted their opposition to the use of the fund for tax relief.
Mayor Lee Brain who was participating remotely on the evening was the first to offer up the counter narrative to Mr. Randhawa's suggestion
"I can understand where Councillor Randhawa is coming from, the challenge is that when you borrow from another fund to pay into operations, essentially you're just delaying another more larger increase in taxes at another time. It's just borrowing now to pay off the inevitable later. So the reality is that smaller more consistent tax increases versus you know a large increase when you are borrowing from another fund, I think is what the challenge with that strategy is ... it's not really a strategy that's going to work because of just how the budget structure, how the operation fund, how legacy fund works and then all our utility funds so you know as much as I understand the desire for that, it won't actually translate to that it just pushes it off to another council to make a harder decision" -- Mayor Lee Brain
"I agree with what Mayor Brain has said, you can't keep taking money out of Legacy cause sooner or later Legacy is going to be empty and then you're going to have a big increase". -- Councillor Barry Cunningham
"When you go and look at the Legacy Fund and what its done for our community, you know if you used it just to keep taxes at the line all the time, then we wouldn't have that money there for its intended use and that's to basically to develop our community and use it to further us ... that's where we've put our money in for the dam, that's where we've put our money for all these big projects that we need to do. And if we just used it as a fund to keep taxes low, then these projects wouldn't happen or we wouldn't have our contribution to put to these projects.
Even though Watson Island has come a long way in the last seven years, it went to being a major liability to yes it is making us money now, but that money is for us to gain more money we're having to invest that money into Watson Island and we're having to put more money into it to make it a better future" -- Councillor Wade Niesh
Beyond the Legacy Fund and Watson Island discussion, Councillor Mirau had one question on the city's planned spending for the Landfill site asking for an update on what is left in the fund that is being used, with the CFO replying that the unallocated amount of the Northern Capital and Planning Grant Reserve was 1.6 million dollars.
None of the council members asked further as to the nature of the required design changes, nor why they were required towards completion of the project.
Councillor Cunningham had questions related to the Cow Bay Marina, asking about the projected revenue streams. Ms. Bomben noted that the last two years had brought a pivot towards temporary use in the wake of COVID travel restrictions.
"The projected income for the marina is about 9,000 dollars. And it is not based entirely on what the last couple of years have been, however the last few years the marina actually has done very good. It pivoted out of itinerary traffic and moved rather into temporary, I believe it was charter moorage.
But now that the restrictions are off to international travel, the marina is back to itinerant traffic which is what the grant funds were received for and therefore that is what the marina has to be utilized for. And we understand from the marina manager that all signs are that the marina will be completely subscribed for the entire summer, so it is not a drain on the city operations at all, and is rather a contributor to the organization as well as the economy, because generally when the itinerant traffic comes into town there is over one million dollars spent in this community" -- City of Prince Rupert CFO Corinne Bomben
As they moved forward toward adoption of Ms. Bomben's recommendation, most of the discussion on the Budget was framed by the Council members noting of the amount of work that they have done on budgets over the past years.
With many putting the focus on the nature of the ongoing work on infrastructure and how they are making progress on the list of projects that they have in motion.
"This year is one of the biggest increases that we're looking at doing over the last seven or eight budgets. You know it's been a long run of zeroes and a couple of 1.5 increases, there was actually a 2 percent decrease in there. We're making a lot of traction and we're moving ahead on a lot of projects this year, RCMP station and our landfill and obviously our dam, which you know, seems to be getting close to water concerns, we hopefully will have it up and running by June I think it is.
The fact that we've been able to go the last seven or eight budgets without really increasing taxes, you know at least our portion of the taxes, which most people don't realize that you know about thirty five percent of the tax bills are monies collected on behalf of other agencies, so there may be increases there, but we've managed to keep it low and keep it down.
And this year going through COVID and all these projects that we have going on, you know I'll say good job to Ms. Bomben and staff for basically getting us even only a 3.63 percent increase, cause it's the amount of projects and the amount of things we have going on, it's not seen by any other community.
And there is no doubt that there is a lot of things that we could still do and a lot of things that people want to see but we have to just keep on trucking forward and try to climb ourselves out of this hole that was created in the past and by the loss of industry and we work our way out of it. And as much as I hate to see taxes go up, the fact that it's 3.6 percent this year, you know I'm going to have to agree with it -- Councillor Wade Niesh
"Beyond the significant number of ongoing projects that we're taking on as an organization it always is a difficult balance to try to strike at a time of significant cost inflation as well. And I think we've seen that with just about every project, that by the time you get pricing from a contractor to the time that everything is arranged and ready to build, price escalation is significant its noticeable and it's only continuing to get worse, it's always a very tough balance to strike" -- Councillor Blair Mirau
Mr. Mirau also noted of the online participation in the Budget process and some of the findings that he took from that contribution by the public.
"We're in a position this year where you know inflation has gone up, prices have gone up across the board, you know we've done everything we can to keep it as low as possible, you know I think the last five or six years we've essentially had a zero percent tax increase and even decreased taxes. So we've been doing everything we can to hold the line of course, but every community is in this situation.
Every community across Canada is facing a two to three percent tax increase every year just to keep up with cost of living that's not to do new things or to do anything special that's just to do cost of living.
This tax increase actually gives us a reserve which we had put 800,000 into last year, and the staff have made it a creative budget this year to be able to do all the things we need to do, pay for things we need to pay for but continue to hold a reserve. Because if we don't have a reserve there will a time when this community is really going to need one and we need to make sure we keep investing in that. So it's a tough decision to make but I do support it in the end" -- Mayor Lee Brain
"When you sit down like we did at the RBA meeting on the weekend and hear the woes of other towns and that, we're actually in pretty good shape, it's been well taken care of over the years. When we first got on council the user fees hadn't been put up for ten or twelve years, everything was starting to fall around our ears, the infrastructure is still not up to where it should be, but the staff has done a great job of getting the dam, the water supply and that, we're now on a water treatment plant. These all cost millions and millions and millions of dollars and if we don't have money in the bank to match federal grants, then we can't get those federal grants' -- Councillor Barry Cunningham
"I agree with Mayor Brain with respect to the need to kind of face the reality that we need to change the tax level and to do it in a way that allows us to make gradual changes, rather than face drastic changes later. I think that you know, if you look at even a family budget, when you know that things are piling up the best strategy is to take things on in small pieces and not leave it until you've got a bill that you can't pay" -- Councillor Nick Adey
Mr. Adey also made note of the importance to keep money in reserve to address any unforeseen economic factors in the future, noting of the current transition of the economy and the prospect of increased interest rates going forward in the next few years.
The City has yet to provide the video archive of their April 25th Council session to its You Tube archive page, once they have done so, we will provide the video to go along with the above commentary from the Council members.
Ms. Bomben's presentation on the Budget opened up the evening's work, while the Budget Discussion and focus on Legacy Inc and Watson Island can be reviewed below starting at the forty five minute mark.
More notes on the Budget discussion and the rest of the Monday session can be reviewed from our Council timeline.
A wider overview of the past Budget themes from the last four weeks or so is available from our Council Budget archive.
Council finally admits we should not be using Legacy Fund as as a source of funding to meet day to day operations. This bunch has been dipping into the Legacy Fund for four years. The previous bunch under Mayor Brain were dipping into it for the four years prior to that.
ReplyDeleteThen after depleting the Legacy Fund for 7 plus years they brag about no tax increase for 7 years. Now I know what Mr. Trump means by fake news.