City council will look at options to get the municipal property tax increase below two per cent or below one per cent, following a decision by the city's standing committee on finance and audit on Monday.
The committee met on Monday to consider recommendations brought forward by city staff to respond to the COVID-19 pandemic, which is expected to cost the city almost $912,500 per month despite some operational savings. The proposed measures were expected to reduce the overall tax increase in 2020 from 3.44 per cent down to 2.22 per cent, but several city councillors said they wanted to see options to further reduce the budget.
"Although we're going to hope for the best, we have to plan for the worst. I want to see as close to zero per cent as possible this year," Coun. Kyle Sampson said. "When I looked at the budget in January, I was looking at it with a very different perspective than today."
One of the recommendations put forward by staff was delaying several capital projects and using the $8.1 million Northern Capital Planning Grant to pay off over $7 million in short-term debt for the replacement of the Willow Cale Bridge and the repair of the massive Winnipeg Street sinkhole.
That recommendation was expected to save the city more than $1.3 million in debt-servicing costs and reduce the overall tax increase in 2020 from 3.44 per cent down to 2.22 per cent – a savings of about $27 for an average Prince George homeowner. If the city reached a zero per cent increase this year, it would save a typical household approximately another $50, city director of finance Kris Dalio said.
The city doesn't have any other short-term loans or debt it could pay off in the short-term without paying a penalty, Dalio added.
Sampson floated the idea of permanently closing the Four Seasons Leisure Pool to the members of the committee. Sampson doesn't sit on the committee, but attended to take part in the discussion along with all the other members of city council.
"We know we need two pools in our community, but we could make due (in the short term)," Sampson said.
The committee members – Mayor Lyn Hall and councillors Garth Frizzell, Frank Everitt and Cori Ramsay – voted to have city staff consider closing the pool for the remainder of the year, on the recommendation of city manager Kathleen Soltis
Projecting the long-term costs and savings of closing the pool without knowing how long construction of the new pool will be delayed because of impacts of the COVID-19 pandemic would be impossible Soltis said. But a report on the potential savings of closing the pool until the end of the year could be produced in time for council consideration.
Frizzell proposed the committee call for city councillors to give up their 1.75 per cent cost of living increase effective on May 1. City council's annual cost-of-living increases are based on the same percentage given to the city's non-union managers, and city staff recommended cancelling the 1.75 per cent increase for staff.
"A request came from the city manager that she not get an increase, either," Frizzell said.
The financial impact of cancelling the increase would only amount to roughly $10,000 per year, Dalio said.
Coun. Brian Skakun also suggested the idea of allocating some of city council's travel and contingency budgets to other uses.
"Ten thousand dollars is a token amount, but it sends the right message," Coun. Brian Skakun said. "I want to know how we get to a zero per cent increase. We have people that are possibly going to lose their homes. To me it's the message, 'what are we doing to show we care?' I think people are looking to us for leadership."
Not all members of city council were convinced that cutting the budget was the right choice.
"I don't see how we're going to be ready for recovery if we're at zero (per cent tax increase)," Coun. Murray Krause said. "I think by aiming at zero we're playing politics instead of doing what is needed. I was on a council that approved a zero per cent increase because we thought it was the right thing to do. It took years to recover."
Krause said he'll need to be convinced that further cuts won't result in the city losing vital staff and reducing essential services during a short-term downtown.
The committee recommended deferring $24.8 million in capital projects from this year to next year.
"What I'm trying to find in all this is 'what is the city's role?' What do we do to help those who have lost their jobs? Small businesses that have lose their revenue?" Mayor Lyn Hall said. "We'll play an integral role in recovery. From recovery perspective, the capital projects is huge for us. The other piece of the recovery, a huge part of it, will come from the private sector."
Coun. Cori Ramsay suggested adjusting the late payment penalty for property taxes be adjusted. Property taxes are due this year on July 3, and the city is required to impose 10 per cent late penalties on those who don't pay by the deadline.
However, the city has the discretion to decide when the 10 per cent total penalty should come into effect.
Normally the city charges a five per cent penalty immediately, followed by a second five per cent in September. Ramsay suggested the first five per cent penalty remain in place.
"That penalty is an incentive to pay," Ramsay said. "(But) I'd like to see the second five per cent moved to Oct. 1."
The provincial government has already mandated that late property tax payments for business properties be delayed until Oct. 1, she said, and in the interest of fairness, residential property owners should be allowed the same amount of time.
The committee also recommended the elimination of late penalties on the second utility bills of the year.
Dalio said 88 per cent of residents paid their first utility bill of the year on time, which is in line with previous years. If the number of residents no paying their utility bills or property taxes increases, the city could be faced with a cash flow problem.
"These ideas are for people who are in real trouble," Frizzell said. "If you can pay on time, please do pay on time, even though there won't be any penalty."
The city has already undertaken operational changes to cut costs, including not scheduling approximately 100 casual and part-time workers at civic facilities, not filing 13 summer labourer positions, imposing a hiring freeze on non-essential jobs, cancelling non-essential travel and the elimination of the cost-of-living increase for exempt staff, Dalio said.
The committee's recommendations were expected to go before city council on April 27, to be finalized on May 11 before the May 15 provincially-legislated deadline. But the request for staff to prepare additional options was expected to necessitate a special meeting of council between April 27 and May 11 to allow city staff time to prepare the information.
"I think the ramifications of COVID(-19) are beyond June and July," Coun. Terri McConnachie said. "If we find ourselves in a bit of pickle later, and have to take emergency measures, the public will be more supportive if we've shown we've done everything we can today."
