City of Powell River Council has given first three readings to its five-year financial plan bylaw.
At the May 7 council meeting, councillor George Doubt, chair of the finance committee, said councillors have had long discussions about the financial plan. He said he had one question for chief financial officer (CFO) Adam Langenmaier. Doubt said part of the report from the CFO on the financial plan at the April 29 council meeting talked about COVID-19 and the impact it is going to have on city revenues and expenses.
“Council asked for a report on what options might be available for council to deal with those impacts,” said Doubt. “Can you give us an idea about when council might expect to see that report?”
Langenmaier said his goal was to have it available for the May 21 council meeting. He said he thinks it lays out a reasonable plan for the city, realizing council can make changes to the five-year financial plan in order to deal with any emerging issues that result from COVID-19. He said with the five-year financial plan, council will be taking a long-term view of the impact on the city’s revenues and expenses, not just for this year, but years in the future.
Councillor Cindy Elliott said when she has considered the financial plan, what has factored into her thoughts is maximum flexibility for the community to respond now and in the future. She said she didn’t think it was a good idea to over-respond early as it could hurt the city more than help.
“Those are the kinds of things I have considered prior to this budget,” she said. “Our approach is one that is well-considered and gives us the flexibility to respond appropriately when we have more information later on.
“Most communities responding right now are doing so without information on how things might look in the fall.”
Mayor Dave Formosa said he had a question for the CFO regarding the city’s flat tax. He said it had been reduced again in this year’s budget. The mayor asked if the flat tax disappears in the five-year budget.
Langenmaier said it does not. He said that in a report he brought to council previously, it recommended the flat tax be reduced to $50 per household. He said the city cannot remove the flat tax and then bring it back at some later date.
“We can bring it down to such a low value that it will make our tax rates and our taxes more equitable to all property values and be similar to other municipalities,” said Langenmaier.
Formosa said he was speaking on the flat tax issue for the last time. He said in light of everything he knows about this city, with COVID-19, there’s a tough couple of years ahead for council.
“We really want to see where we stand,” said Formosa. “I can guarantee you with all of my experience in real estate and house building, removing this flat tax really hurts the upper end.
“I’m telling you, we’re pushing the higher value sales into the regional district and we’re pushing them there rapidly.”
He said, however, he will be supporting this budget.
Councillor Jim Palm said in the COVID-19 age, the city is in a special situation with its mill and all of the other factors that have to be dealt with financially.
“In this time, eliminating the flat tax, in my estimation, as I’ve said before, is the wrong thing to do,” said Palm. “It places a heavier burden on taxpayers and is not sharing the load across the board. It is a shame that our council will not consider the status quo in regard to the flat tax.”
Councillor CaroleAnn Leishman said she wanted to clarify for the public that the city was not eliminating the flat tax, but that there would be a reduction by $70 this year.
Palm said he understands it will be reduced over time to $50, and that the city is leaving the flat tax in place so that, if desired, a council down the road can bring it back.
“But, my sentiment is, we are hurting some fixed-income folks, even reducing it to $180 this year, from $250 currently,” said Palm.
Council voted in favour of the first three readings of the five-year financial plan, with Palm abstaining.
