City council shows no intention of changing the tax increase they agreed to for 2020 despite the economic downturn brought on by the Covid-19 pandemic.
Councillors were presented with a memorandum on the city’s finances at Monday’s government priorities committee meeting.
Senior Administrative Officer Sheila Bassi-Kelllett said that the city entered 2020 with a healthy fiscal picture, but that the coronavirus pandemic has presented serious uncertainties for the months and years ahead.
“Overall, the city is in a solid financial position and that’s really a result of prudent planning reasonable reserves,” she said. “However, in that context we are very, very aware that there is uncertainty and anxiety that’s accompanying these unprecedented times.”
She said council had the option of eliminating a tax increase for 2020 in order to give municipal taxpayers some relief in the face of the pandemic, but the administration’s recommendation is that they keep the 1.63 per cent increase already agreed to. Forgoing the revenue it would generate now would mean councillors would be faced with even tougher decisions with even higher proposed tax increases of as much as eight and nine per cent in 2021 and beyond.
This would also be on top of a three-per-cent increase on user fees and charges that goes into effect Sept. 1, she noted.
On Monday city staff presented council with three scenarios of what it is believed the city’s fiscal will look like when the economy reopens.
Those hypothetical situations were based on the city’s projections for operations returning to normal on either July 1, Sept. 1 or Jan. 1, 2021.
Councillors spoke in favour of keeping the 1.63 per cent property tax increase as had been planned.
“I think council put a lot of time into their decision making and I do understand that we’re in a very unique situation that of course we completely and utterly were not expecting to happen,” Coun. Julian Morse said. “I do think that it’s important to maintain the city’s finances as much as we can through this. I don’t think it would be prudent to start changing things because anything that we take away now is going to hurt more later.”
Coun. Shauna Morgan, Cynthia Mufandaedza, and Robin Williams also supported the idea of keeping the tax rates as planned.
“I think looking at the long term, it makes more sense to continue with the planned path,” said Morgan. “Given that, there’s a lot of unknowns in the future – there may be you know second wave third wave of COVID – and so if we start to drain our coffers now, we may have even less resources to be able to prepare for cushioning impacts going into the future, including next year. ”
Both Bassi-Kellett and Sharolynn Woodward, director of Corporate Services said that the city is committed to following through the work plan set out for capital projects, even as the pandemic has posed a challenge to municipal planning.
“As the time grows closer (to budget 2021), we’ll also have a clearer picture of what projects we are able to complete and which ones we won’t and why we’re not able to complete those,” Woodward said, adding that this is similar to any other year. “Of course this year we’re challenging to come forward with that, but we’re optimistic that as we get more information about what is happening with COVID related restrictions and how that impacts our ability to do business, we will be able to refine what 2021 will look like including which projects we can and can’t do and what the money implications are of that.”
Coun. Williams said he supports the planned property tax increase for now, but is watching to ensure that residents aren’t paying for projects that might not be carried out due to expenses from Covid-19.
“As it stands right now I would be in support of the memo but looking forward to discussions as we get closer to budget 2021,” he said.
Mayor Rebecca Alty said she and council showed support for retaining the tax rate so that the city can reduce tax rate impacts in later years. Alty said council will get to vote on the issue when a mill rate bylaw is brought forward June 8.