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City budget talks begin

Capital costs would leave shortfall of $160,000 to balance municipal finances
BALANCING ACT: City of Powell River chief financial officer Kathleen Day [left] recently presented to city council the first draft of capital project requests for the 2018 budget cycle. Paul Galinski photo

A lot can change before the City of Powell River budget for 2018 is finalized and approved by city council. For now, following the release of the capital projects draft budget on January 11, finance committee chair and councillor Russell Brewer said he is still going on the assumption that the overall tax increase for the 2018 operations budget can be held to two per cent.

With a general election in the fall, Brewer, who will be seeking his third term on council, said the increase is defensible and he has no trouble with taking it to the vote. Other councillors are comfortable going higher.

After five hours of discussion and questioning city chief financial officer Kathleen Day, some councillors seemed open to considering a three per cent hike, according to Brewer.

“I kind of got that sense,” said Brewer. “Some might be leaning towards that. At the end of the meeting, we were going to get into that, and I was pretty strong in saying I want to stick with two per cent.”

Brewer said he has the votes to support the two per cent target, but there’s still a long way to go.

The finance committee’s marathon five-hour session was able to significantly cut back $420,000 from the total unfunded amount of approximately $600,000 in capital projects requests.

A $158,000 shortfall remains to be bridged in the day-to-day operations budget in order to balance finances, according to Day. She said it still remains to be determined if the budget can hold to a two per cent tax increase.

Happy with the direction budget talks are going, mayor Dave Formosa said new ideas and thoughts are resulting from the meeting that can be explored to try and close the gap.

“If we've got to cut this, or cut that, or look at service delivery, we've got to hold ourselves in check," said Formosa, "but, at the same time, do what it is we feel the public needs done.”

The final decision is a political one, but as the budget currently stands, Day said the city can’t pay for everything.

“It wouldn't leave enough in the accumulated surplus as a comfort level,” said Day.

Formosa said he would not be concerned if accumulated surplus funds were used to balance the budget.

“To dip into those funds for ongoing city business is not a good practice,” said Formosa, “but for one-off issues that happen to come up, that's a good use. For regular day-to-day business, however, it's not a good practice at all.”

If council wanted to approve paying for unfunded capital projects out of accumulated surplus then Day said she would need to look at everything again and make a recommendation to council about the impact of a depleted accumulated surplus.

“I need to come back with recommendations of options,” she said.

To complicate the budget process, Day is leaving her position effective the end of January and will be replaced by an interim chief financial officer. Her resignation in the middle of budget talks will present challenges, according to Brewer.

“We've had lots of different chief financial officers and that makes it challenging to get to a strategic place beyond doing the day-to-day operations,” said Brewer. “This will be my fifth chief financial officer I'll have worked with, so you have to develop those relationships all over again.”