City wipes out tax hike

City reserves will take a beating, but are healthy enough to wipe out a planned 2.9% tax increase and offer 10% discounts on utility bills for the remainder of the year, under the terms of a COVID19 relief package approved Thursday by council.

“We have reserves and we put them in place for a rainy day, said Mayor John Vassilaki. “We don’t just have a rainy day at the present time — we have a huge storm, and we somehow have to slow that storm down so people can catch up and survive.”

The 2.9% tax hike that was previously approved for 2020 will effectively be reduced to zero through a matching credit to property owners on their tax notices. Doing so will cost an estimated $957,000, and leave just $148,000 in the city’s financial stabilization reserve. The move was supported unanimously by council during the nearly five-hour meeting, which was held by videoconference.

The relief package is worth a total of about $1.5 million, $960,000 of which will be funded from reserves, while the balance will come in the form of reduced revenues, mainly from city-owned utilities. All told, it will save the average residential property owner $10 to $30 this year, and the average non-residential property owner $500 to $800, according to city finance manager Jim Bauer.

None of the changes will take effect until council votes on the enabling legislation at its next meeting, May 5

TAX DEFERRAL

While the July 31 deadline to pay property taxes won’t change, there will be no penalty for late payment through the end of September, then 10% after Oct. 1.

Council voted unanimously to support the measure. Vassilaki suggested those two months’ grace will be imperative if businesses do reopen in some form by summer.

“Maybe end at the end of June, the commercial properties, especially in the downtown area and industrial area will (reopen and) have some time to bring in some revenue in to pay their taxes,” he said.

UTILITY DISCOUNT

All customers will enjoy a 10% discount on their utility bills — sewer, water and power — for the remainder of the year. It will essentially extend the 10% early payment discount to everyone, regardless of whether or not they pay on time, and cost the city an estimated $400,000.

Although council considered the option of simply letting customers defer their utility payments, Coun. Campbell Watt said that would dig holes.

“Nobody is going to jump back into making more money than they were (before the pandemic) to pay these” deferrals, said Watt. “We’re doing something without creating a bigger problem for us as the city and the people.”

Coun. Julius Bloomfield, the lone dissenter in the 6-1 vote, suggested deferrals would match up with senior government loan programs that are meant to ensure businesses can pay their bills.

The 10% discount will be cancelled if the province comes through with funding to offer three months’ free power for customers and their spouses who lost their jobs, plus owners of businesses that have closed. That program is already being offered by BC Hydro to the 95% of B.C. it serves, and the city has asked the provincial government to extend it to the remaining 5%.