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Council to look at two tax options: Less than two per cent increase and less than one per cent increase

The city’s finance and audit committee has directed staff to provide two tax-reducing scenarios to council as the municipality grapples with a monthly shortfall of as much as $1.3 million due to the COVID-19 pandemic.

One scenario will see this year’s tax increase decrease from the originally budgeted 3.44 per cent to less than two per cent. The second will see it reduced to less than one per cent.

Some councillors, however, wanted even more … a zero per cent tax increase this year.

Kris Dalio, the city’s director of finance, explained to the committee Monday that by paying off the loans used last year to pay for the sinkhole on Winnipeg Street and the Willow Cale Road Bridge replacement using reserves, the tax increase needle would move from 3.44 to 2.2 per cent.

Coun. Frank Everitt suggested looking at going trying to find a way to hold the increase to less than two per cent.

“When we made all these decisions, it was a different world,” said Coun. Frank Everitt. “Let’s do the right move this time.”

Coun. Kyle Sampson, however, said he would like a couple of options to look including a scenario where there is no tax increase this year.

“I appreciate that we have operational needs and we don’t want to hit (taxpayers) over the head next year with a larger increase,” Sampson said. “Every year my staring point is zero and we work from there … what do we need as an operation and how can justify that and we go from there, up or down.”

He said he would like to see an option getting the city to a zero per cent increase.

That echoed a comment from Coun. Terri McConnachie earlier who also pondered the possibility of a zero per cent increase.

“I understand that we have to find a balance between savings and the strangulation of core services,” she said. “But I think we’ll be in the best position if we do all we can now to challenge ourselves to find the greatest amount of savings. If the easiest way to see that and measure it is with a zero per cent increase, then so be it but don’t stop there.”

Coun. Cori Ramsay queried what a less than two per cent increase would mean for the average household. Dalio said a 2.2 per cent tax increase would mean a $50 tax increase on the average household.

Coun. Murry Krause worried that too low a tax increase would result in the city playing catch up for a long time.

“I want to do what makes sense,” he said. “I want to see how we’re going to be ready for recovery.”

He said he was on council when it did a zero per cent increase.

“It took years for the city to recover and get back to a place where they were meeting the needs of the community,” he said.

Coun. Brian Skakun said it’s about the message and showing empathy.

“We’re going to have businesses in this community that are going to get charged more than $50 per year with the taxes that are going to close their doors for good,” he said. “It’s already happened, we’re going to have people who lose their homes … What are doing to show that we care, that we’re trying to drive down some of our costs? If we could come in at zero, that’s ideal for me.”

The committee agreed to direct staff to look at the less than two per cent and the less than one per cent options. The downside, however, will be that information won’t be ready for the April 27 council meeting. The final tax rate has to be set by council no later than May 15, which means Mayor Lyn Hall may have to call a special meeting of council, likely May 4, to deal with the tax increase reduction scenarios.

The committee also approved a number of other motions and will recommend to council that it defers nearly $25 million in capital projects in civic facilities, parks, and utilities; and that Council eliminates the 10 per cent penalty on late Sewer, Water, and Solid Waste utility payments for the period of July 1 to December 31, 2020. The committee also approved a motion to explore the revenue and expense impacts of keeping the Four Seasons Leisure Pool closed for the remainder of 2020. Council will also roll back the remuneration increase for council members, which came into effect January 1, on May 1.

 

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