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City of Powell River staff given time to look at potential cuts

Council votes to amend budget timeline
MAKING ADJUSTMENT: City of Powell River chief financial officer Mallory Denniston suggested to council that the timeline for the municipal budgeting process be amended so staff members can examine more fully the implications of potential cuts and revenue increases.

City of Powell River’s 2024 five-year financial plan and 2024 property tax timeline will be adjusted from what was originally adopted.

At the November 14 committee of the whole meeting, chief financial officer Mallory Denniston proposed changes to allow for senior staff to look for cost savings and revenue increasing options.

“For background, the current timeline as approved by council in August started and ended the financial planning process earlier, starting in August and having the financial plan adopted in February [2024],” said Denniston. “There is great benefit to an early budget process and one of the benefits is it reduces the pressure on mayor and council to make a decision under pressure because the deadline is May 15. As well, it gives ample time for tax rate discussion. We need to understand what the total tax revenue is going to be before we can look at tax rates and ratios.”

Denniston said based on the current timeline, much of the financial planning work has already started, such as setting sewer utility rates, online public engagement, in-person engagement and the first budget draft has been presented for consideration. She said part of the first draft was to include some service level changes to be considered in draft two of the budget.

Staff presented some service level change options in draft one, said Denniston, and council’s direction from the presentation of the first draft was to present more detail.

“In the past week, the directors worked with staff to increase the cost savings list and the revenue increase list and have found that it is rushed to compile the list with a one-week turnaround,” said Denniston. “Rather than presenting a list that wasn’t fully comprehensive, we are presenting a change in the timeline to request an extension be given to budget deliberations so staff can have time to do full-service reviews and come back with a comprehensive list in February for full consideration by council.”

Denniston said departments are looking at five to 10 per cent cuts as an internal target, so staff can come with an equal service cut plan consideration that is balanced for the next draft of the budget.

“As a background, that’s $2 to $4 million in savings annually,” said Denniston.

Two benefits of extending budget deliberations is that in January, the city receives the completed roll from BC Assessment, so the impact can be seen of potential changes to assessments, said Denniston.

“The big potential change we are waiting on is understanding what the assessment will be for the [Catalyst Paper] mill site so in January, we’ll have that information, and so when you are presented with the service cuts in February, you’ll have a more fulsome understanding of the full impact to the taxpayers in 2024,” said Denniston.

She said when budget deliberations are extended, it will provide more time for communication and engagement.

Denniston said she had received questions from the public regarding the 2024 budget and one indicated that it was great that the city is considering adjustments to service, but what about the taxes imposed by authorities that comes through on the property tax bill, such as qathet Regional District, Powell River Regional Hospital District and the school board.

“We don’t have control over those costs, or even to influence them,” said Denniston. “All we can control is the municipal taxes, so that’s what we will focus on, because it’s in our control. We encourage the public to engage with those other authorities and ask their questions about the tax rates. In April I get the tax rates from the other authorities and I do bring to council the impact, so everyone is in the loop on the full impact to the taxpayer.”

Mill site taxation

Councillor George Doubt asked if the city had a range of prospective taxation for the mill site. Denniston said she did not have any information that could be shared.

“I can’t share estimates that we have received regarding assessed values but that due diligence has been done,” said Denniston.

She said there will not be the revitalization tax exemption in 2024, which has for years provided the mill a reduced tax rate. However, a decrease in the assessed value is expected, she said. However, the dam is still operating and that taxation would be at the full value.

“There’s not just decreasing pressures on the tax from the mill site, there are also increasing pressures in 2024,” said Denniston. “We appreciate the public’s patience as we wait for January and have more information that we are able to share.”

Mayor Ron Woznow said he hopes the public can be patient. He said the city had come through a tumultuous year of staffing, and council will be very careful in giving staff the time required to bring forward financial options for council to consider.

Councillor and committee chair Earl Almeida asked Denniston what percentage of the total tax bill was from City of Powell River assessments, and what percentage was from the other taxation authorities.

Denniston said about 70 per cent of the tax bill was from the city and 30 per cent from other authorities.

Councillor Cindy Elliott suggested that a report on the second draft of the 2024 five-year financial plan be prepared for a committee of the whole meeting for the last Thursday in January. She suggested a workshop on that date, which is January 25.

“When we get to making decisions, we could have them on track for February,” said Elliott.

Elliott made a motion to move the proposed updated timeline up a month, so rather than dealing with the second budget draft in March, the matter would come before councillors in February. The motion passed, with Doubt opposed.

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