City of Powell River chief financial officer Adam Langenmaier presented a snapshot of the city’s fiscal position for July 2020, showing a number of taxpayers have not paid their property taxes.
At the August 27 city finance committee meeting, Langenmaier said historically, by this time of the year, 97.2 per cent of property taxes would have been collected. In a non-COVID-19 year, the tax deadline is July 2 and penalties are applied on that date. This year, the deadline was extended to September 30, after which a five per cent penalty will apply, and there is a second penalty date of December 14, where another five per cent will be applied.
Langenmaier said as of the week of August 10 to 16, a total of 75.9 per cent of the taxes had been collected. During that week, $76,306 in taxes was collected. Langenmaier said he expected that trend to continue for the next couple of weeks, and that an uptick is expected in mid to late September.
According to a chart Langenmaier published in a report to the finance committee, $24,135,659 in taxes had been collected, with $7,676,612 outstanding.
Langenmaier then pointed to a chart showing property taxes collected by property class. He said the city has collected 90 per cent of all residential property taxes, which is higher than he had estimated. However, that 10 per cent not collected accounts for 32 per cent of overall uncollected taxes.
“It really shows how big our residential portion is of our total taxes,” said Langenmaier.
He then pointed to the business class, which had 62 per cent of the class collected, amounting to 21 per cent of the total outstanding.
“That number is more in line with what I was expecting, because they have the ability to pay up until September 30 without penalty,” said Langenmaier.
Noteworthy in property taxes collected by class was major industry, which mostly comprises Catalyst Paper Corporation. Only $15,465 of the $3,521,997 has been collected. When asked by the Peak if this meant Catalyst had not paid its taxes yet, Langenmaier said that was a good interpretation of the report.
Outlining fees and charges, Langenmaier said the city is seeing an uptick in harbours and campground revenues.
“I don’t expect campground revenues will hit budget targets because the campground has been limited to 80 per cent capacity for COVID-19 measures,” said Langenmaier.
According to Langenmaier’s statistics, the planning department’s revenues are 136 per cent over budget due to building activity. While $393,827 had been budgeted to the end of July, the actuals show $534,340 had been collected.
In terms of wages, less has been spent than budgeted. Langenmaier’s report states that the single largest expense to the city is wages, which represent nearly two-thirds of total operating expenses. He said the city should be under budget for wages for the year unless there are significant changes.
“We will hopefully see a surplus there,” said Langenmaier. According to his report, as of July 31, the city had spent $9.3 million in wages, which is below the budgeted amount of $10.6 million. Langenmaier’s report stated the cause of the wage expense reduction is linked to closure of Powell River Recreation Complex, as well as having a number of part-time staff not working.
Langenmaier then outlined the city’s cash position. He said the city has “lots of cash in the bank.” According to his report, the influx is due to the grant and borrowing for the liquid waste treatment plant project. Cash holdings for the city as of July 31 is $69 million, but the amount of unrestricted cash is $10.5 million, which is consistent with prior months, according to Langenmaier.
Finance committee chair and councillor George Doubt said he had been reviewing what Langenmaier came out with in his first projections of tax revenue after COVID-19 for the September estimate, which was a collection of 75 per cent.
“It just strikes me how accurate that prediction was,” said Doubt. “A lot of it was guesswork but for the estimation to be that close was good. The next big bump will be close to the end of September when we get to the deadline for the penalties to be assessed on unpaid taxes.”
