City council approved a 1.75 per cent tax increase during a special council meeting on Thursday night, down from the 3.44 per cent increase council approved in its initial budget.
For a typical Prince George home, the reduction will mean a savings of $38 compared to the original planned increase. However, it means the city's portion of property taxes for a typical home in the city will still rise by $39.
"It's 50.1 per cent of what we started with. We've cut the increase in half," Coun. Garth Frizzell. "It is as low as possible. I'm worried for what happens next year, if we go lower than 1.75 per cent."
Non-residential properties would see greater savings, thanks to an average 25 per cent reduction in the school tax portion of property taxes offered by the province. A typical light industrial property will see a 0.31 per cent overall property tax decrease, a typical major industrial property an overall 4.08 per cent decrease and a typical business property will see an overall 6.91 per cent savings.
Coun. Kyle Sampson and Brian Skakun urged their colleagues to consider a tax increase of only 0.88 per cent, but their motion was defeated.
In a report to council, city manager Kathleen Soltis and director of finance Kris Dalio said a deeper reduction in property taxes would means more layoffs.
"As of April 27th, 98 staff were no longer scheduled for work in their own positions; of the 98, 18 employees had been reassigned to other jobs. At this time, there are also 40 vacant positions that are not being filled," Soltis wrote in a report to city council.
Further reductions to the tax increase would have required between five and 37 additional layoffs, depending on how much the increase was reduced, Soltis' report said.
"We are a service industry. Municipal business is two-thirds labour," Dalio said. "The non-labour is so tight. And the non-labour is the static dollar value we need to run these services. When we talk about reducing expenses, it will impact labour at some point. We're just too much of a labour-dominant industry."
Coun. Murry Krause said he wasn't interested in seeing any further lay offs at the city.
"These people were counting on that income, and relying on it," he said.
Every city department is looking for cost savings to try to offset the approximately $900,000 per month loss of revenue the city is facing, Soltis said.
"My concern is about that $900,000," Sampson said. "My question is what is our plan to make up that money? Right now we're talking about the tax levy, but the big elephant in the room is our loss of revenue."
It's city administration's job to, "close the gap," Dalio said.
OTHER MEASURES
The reduction of the property tax increase was part of a suite of measures approved by city council on Thursday night.
Council deferred $24.8 million in capital projects, eliminated city council's cost-of-living wage increase, eliminated the 10 per cent penalty on October's utility bill and postponed the second five per cent penalty on late property taxes from taking effect in September to Oct. 1.
"Instead of having that entire (utility) penalty imposed the hour you're late, we're looking at a more compassionate approach," Frizzell said.
If utility bills aren't paid by Jan. 1, they will be added to the property taxes owning on a property and begin accruing interest.
"This is kind of a bit of gesture to the citizens that I've been asked for," Coun. Terri McConnachie said. "If you can pay on time, please pay on time. If you can't, there is a little leeway."
City council also received information on the possibility of closing the Four Seasons Leisure Pool for the remainder of the year, but opted to wait until provincial public health restrictions are lifted allowing public pools to reopen to make a decision on reopening the pool or not.
City council also asked city staff to report on the possibility of diverting city council's $179,500 in discretionary budgets to create a grant program for local non-profit organizations. Soltis advised council to simply leave the money unspent, to make up some of the $900,000 per month in lost revenue the city is facing.
Coun. Cori Ramsay said she had to agree with city administration's recommendation.
"We're trying to save money right now, not spend more."
Because of public health orders in place, council's meeting was held without the public present and live-streamed on the city's website. However, the feed repeatedly froze making it impossible to hear what was being said.
City general manager of administrative services Walter Babicz said the recording of the meeting would be made available as soon as possible on the city website, with the full, uninterrupted video.
