No decision on tax levy at city budget meeting

Prince George residents will have to wait until Feb. 8 to find out what, if any, property tax increase they'll see for 2021.

City council approved the city's 2021 capital budget Wednesday and the majority of the city's 2021 operating budget. However, two budget items with the potential to significantly impact the city's tax levy were deferred until council's Feb. 8 meeting.

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Council held off on making a decision about how much of the $6.11 million COVID-19 Safe Restart Grant to use to offset a proposed two per cent tax levy increase.

Based on their comments, it appears council is divided on the issue.

"I think we have the opportunity, when we set the tax rate, to zero (per cent increase)," Coun. Brian Skakun said. "We owe it to the residents and businesses in the community."

The city budget includes more than $4 million this year to replenish the city's endowment fund that was depleted by the cost overruns on the downtown parkade project, he added.

According to a report presented to city council on Monday, to keep the city's tax levy increase to two per cent would require using $796,185 of the $6.11 million grant.

To eliminate the tax increase for 2021 would require using more than $3 million, leaving roughly half the balance of the grant for 2022.

"Zero per cent is what I'm looking for," Coun. Kyle Sampson said.

Sampson said every year he's asked for council to be presented a zero per cent tax increase option, to see what that would mean for city services.

City director of finance Kris Dalio said the city administration already cut the proposed tax increase from more than three per cent, down to two per cent, as directed by the city's finance and audit committee during a meeting last year.

"I believe that administration has done what it can do, and anything else would require a service reduction that would require a vote of council," Dalio said.

Coun. Cori Ramsay said she's concerned using too much of the Safe Restart Grant in 2021 to offset a tax increase, which could leave the city in a tough financial situation later.

"At the end of the day, these funds are to help us until our revenues are back up," Ramsay said. "It's really a challenging budget cycle. We're down 40 full-time employees. I just don't know how much more we can cut."

One possible option would be permanently closing the Four Seasons Leisure Pool, she said. The city is budgeting more than $400,000 in 2021 to maintain the pool, even though it is closed and may never reopen, she said.

"(And) we have 22 additional facilities that are leased to third parties that are costing us money," she said.

It may be time for the city to look at selling those facilities and allowing those third parties to run them themselves, she said.

Coun. Garth Frizzell, who chairs the city's finance and audit committee, also previously voiced concerns about not having enough left in the grant to cover costs associated with reopening facilities once the pandemic is over.

"I can understand Coun. Frizzell's concerns about spending the Safe Restart dollars," Coun. Murry Krause said. "At the end of the day, it might mean a small tax increase and using some of the Safe Restart money."

Council also deferred voting on a proposal to add two training officers to the city's RCMP detachment on Wednesday, so council could get additional information about the proposal. The proposal was expected to cost $96,000 by the time it starts in late 2021, and $365,000 for the full year in 2022.

Mayor Lyn Hall said before he's prepared to support the proposal but he wants to ask Supt. Shaun Wright more questions about funding for dedicated police units, including the dedicated downtown unit.

"I'm not suggesting for a moment that we don't need this, but I need more information," Hall said. "Why should we, as a municipality, pay for training?"

City council did sign off on a number of items, including a $1.5 million increase to the city’s snow clearing budget to bring the budget in line with what it has been spending on average over the last few years.

In 2020, the city spent $10.4 million on snow clearing, despite only having a budget of $8.5 million for the service. The extra costs were paid using the city’s contingency funds, Dalio said.

“This is where a big part of the increasing costs of running the city is coming from,” Frizzell said.

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