City council considering 3% tax hike for 2021

Won’t make up for projected $6.8M revenue loss from COVID-19

The city’s 2021 budget may impose a tax hike of three per cent, according to a new city staff report, an increase that will not make up for the projected revenue losses of $6.8 million that the city is facing due to the COVID-19 pandemic.

A previous report to councillors in May states that the city has lost $6.8 million in revenues from sources such as parking fees, arena fees and transit. Relinquished transit fares represent a loss of $1.5 million due to riders entering the bus from the rear doors to maximize physical distance with the driver (which doesn’t allow the drive to collect a fare).

These financial losses are occurring due to “an unprecedented event,” states the new city staff report, and since the pandemic isn’t over the losses may still increase.

“This report does not provide a funding solution for the $6.8M but does deal with some the impacts that may carrying over into 2021, such as low commodity prices,” city treasurer Richard Freymond writes.

Councillors will receive this report at a finance meeting on Monday.

Meanwhile, two councillors have said they don’t want to impose a tax hike to make up for the projected shortfall.

“People can’t afford a large tax increase to make up that difference,” said Coun. Andrew

Beamer at a meeting on May 25.

Coun. Dean Pappas, the city’s finance chair, said at another meeting earlier in May he has no appetite to increase taxes by four per cent or so in a single year to cover the shortfall.

He has suggested solutions such as drawing from the city’s reserves, and a separate financial report by city staff (which councillors will also review on Monday) recommends councillors begin by setting aside $1.5 million of the capital levy reserve next year “as a first step to fund these financial impacts.”

A three per cent tax increase is a bit steeper than this year’s increase of 2.75 per cent.

For an average taxpayer with a home assessed at $260,000, an all-inclusive increase of three per cent would add an estimated $124 to the tax bill, bringing that bill up to a total of $4,259 (up from $4,135 in 2020).

Although city councillors will review this report on Monday, they aren’t about to set their budget for next year; deliberations don’t happen until November.

People can speak up about this suggestion of a three per cent tax increase at a virtual public meeting at City Hall on June 24 at 6 p.m.

Then at a meeting July 6, council will be expected to decide whether it wants staff to write a draft budget for 2020 that imposes a three per cent tax hike.