Editor's note: This article has been corrected to reflect the change in major industry taxation taking effect in 2015 not 2014 as previously stated.
Readers may be forgiven for assuming a city budget could be a bore. Perhaps that is why only six members of the public attended the final opportunity for comment upon the City of Powell River’s five-year financial plan.
Small attendance at the special council meeting on Thursday, May 8, meant many missed the delivery of what Mac Fraser, chief administrative officer, suggested was the “best budget I have seen in 20 years of service in local government and one person did it with two jobs.”
Lynda Sowerby moved into the role of acting director of financial services after Dave Douglas vacated the position in the fall, 2013. By doing so, it was her responsibility to pull together the plan, which has been aptly named Living Within Our Means. With the recent hiring of Shehzad Somji into the chief financial officer role, Sowerby is now manager of accounting services.
“Council gave us direction to develop the five-year financial plan,” said Sowerby, “and that five-year financial plan is an integration of all the revenue and expenses of the general water and sewer fund, transfers to and from general reserves, payment of debt and acquisition of capital assets. This will be accomplished in the years 2014 to 2018 with the implementation of the living within our means strategy. In 2015 to 2018 there will be a cap on taxation.”
The five-per-cent flat tax reduction will continue.
The city is moving into a period of paying off debt, checking spending at the door and exploring services to bring in revenue. The reason is a $936,993 shortfall in general operations funding. For 2015 through 2018 expenses will be trimmed to accommodate the deficit.
Annual transfers to the hospital district will drop 50 per cent starting 2015. The debt of building Powell River General Hospital will be paid off at midnight on December 31, 2014, before payments begin for Willingdon Creek Village January 1. These new payments will be $500,000 less each year than for the hospital, recouping $2 million to the end of 2018 in the five-year plan.
Providing 64 per cent of the city’s revenue, residents, industry and business alike can expect a 1.5 per cent increase in taxes 2014, followed by four years of no increase. Residents will pay $9,539,596, an increase of roughly $300,000 per year, and business taxes will bring in $2,692,760, an increase of $91,000 per year.
For major industry, the taxation amount remains the same for 2014, at $2,250,001. This amount will increase by $78,771 to $2,328,772 in 2015 and remain at this new level throughout the rest of the five-year plan.
Money set aside for equipment reserves will be held back for two years, 2015 and 2016, before once again heading into the account.
Parks and Recreation shows a consistent shortfall. While sales of services, such as use of the ice arena or swimming pools and exercise facilities, record around $1.13 million income, expenses are almost triple that, leading to a yearly $3-million deficit.
There will be no increase in costs to consumers for water and sewer. By 2017 the debt for the water treatment facility will be retired. This, together with the retirement in 2016 of the short term debts for the track and development of the harbour area will reduce expenses by $465,000 per year.
Sowerby outlined an anticipated $9-million revenue in government grants for 2017. This money would be accounted for through two-thirds funding for both water (being the replacement of the feeder trunk main, a total cost of $4.6 million) and phased consolidation of the city’s liquid waste management plan. Phase one, if the city chooses to pursue phased consolidation, would mean looking for a $10-million grant for an overall cost of $13.5 million. According to a graph presented by Sowerby, Phase two is anticipated to cost $20.5 million in 2032.
In summary, Sowerby said the city’s revenue is anticipated to be $26,739,207. “We are very reliant on taxes and it would be nice to see us grow the other areas, particularly sale of services.” She asked that council consider the financial plan bylaws 2373, 2014 for three readings and final adoption.
The plan, which is Bylaw 2373, was read a first, second and third time by council, as were the Annual Tax Rate Bylaw 2372, 2014 prior to a legislated deadline of May 15, and Sewer User Rates Bylaw 2375, 2014. Council voted unanimously to accept all as presented.
A full copy of the financial plan is available on the city’s website.
