An injection of provincial cash into city coffers will prevent significant service cuts in 2021, while taxpayers are facing a provisional tax rate increase of just less than a half a per cent, the lowest in recent memory.
“I think this would be the lowest tax increase that we’ve experienced in over a decade,” Mayor Ken Christian said.
“But we are facing some challenges that we have not seen in this decade, in fact, this century.”
On Tuesday, city council participated in the first of many budget meetings, at which corporate services director Kathy Humphrey detailed $6.7 million the city is anticipating in COVID-19 Safe Restart funding to local governments.
Humphrey told KTW the city found out about the provincial funding in early November.
The city anticipated some sort of pandemic relief, but the amount and way in which it would be allotted was unknown, with Humphrey noting she anticipated grants on an application basis.
Instead, the funding is a one-time cash injection distributed to municipalities based on a modified per capita basis, with the city’s understanding the money can be used as needed. Details are yet to come.
Staff are proposing to use some of the funds to offset anticipated revenue losses and added expenses in 2021 resulting from the pandemic and put the rest aside for yet unknown future needs.
Christian said the funding is welcome and will act as a safety valve.
“The impacts of COVID-19, we’re not done with them,” Christian said.
“In fact, we may well be just seeing the beginning of what could be some significant impacts going into 2021, so I think leaving that cushion is a very prudent thing.”
The city anticipates $2.8 million in lost revenues next year from recreation user fees, facility rentals, parking and more. In addition, it is facing $400,000 in added costs for increased maintenance to nature parks, safety equipment and facility and technology rental. The impact to property taxes from the total $3.2 million in lost revenues and added costs would be 2.7 per cent — which is about what the city’s annual tax increase has been in recent years.
Prior to learning of the provincial money, the city had been mulling significant service cuts in 2021, including a reduction in hours at the Canada Games Aquatic Centre, which is no longer being considered.
“We were proposing service level reductions in all sorts of areas,” Humphrey told KTW, noting reduced hours in facilities, keeping arenas closed and reducing snow clearing.
“Everything was on the table.”
If council chooses to move ahead with that offset, the city could still set aside $3.5 million in pandemic aid for the future, which is recommended by staff.
Humphrey told KTW the city does not know what kinds of provincial health orders may come into effect or what additional impacts of the pandemic may yet be experienced.
It is unclear whether the province would claw back money should the funding not be used and a vaccine became widely accessible, following recent news that two vaccines have shows promising results.
Humphrey added that the city already stomached pandemic costs in 2020.
Meanwhile, independent of the pandemic, the city still faces ordinary budget additions worth $4.9 million, including annual wage increases set out in contracts ($1.9 million in 2021), technological upgrades ($870,000), asset-management funding and increased policing costs.
The city is also facing $252,000 in costs to secure public washrooms and spaces next year and $200,000 to upgrade rail crossings at Third Avenue and Singh Street, as a result of the rail expansion in Kamloops.
During Tuesday’s discussion, there was also talk of possibly using some of the money to fund a patio-expansion program.
The city is looking to fund some of the expenses from reserves.
Some of it is offset by administrative budget reductions, such as events, training and travel not occurring during the pandemic. At the end of the day, the city is looking at a provisional tax hike of just shy of a half per cent.
Council in the summer had asked staff to keep next year’s tax rate as close to zero per cent as possible, given the financial strain on residents during the pandemic.
Therefore, staff also provided a series of additional cuts to be deliberated by council at a future date.
These include reducing service at the Westsyde Pool and Fitness Centre or closing it entirely for 2021, which would save the city between $200,000 to $600,000, depending on the scenario, but which has been contested by residents in that area.
The fate of the Westsyde Pool and Fitness Centre has been a lightning rod for controversy over the years.
On Tuesday, Coun. Arjun Singh stressed the importance of providing residents with a sense of normalcy during trying times, telling council he is not in favour of cutting recreational services during the pandemic.
Other cuts (and savings to be realized) proposed include reducing and increasing the temperature in civic facilities during winter and summer by one degree Celsius ($200,000), reduction in use of Memorial Arena ($220,000) and eliminating city street light inspections ($20,000).
Supplemental budget items deferred from 2020 will go to council in 2021 and a list of new items may also be on the agenda at a future budget meeting.
Council meets again next week to talk about the budget. If the public wants to weigh in, they will need to do so online on the city’s Let’s Talk page.
The final tax rates will be set in the spring of 2021.