City tax hike for 2021 could creep up to 3.5 per cent

Clarke asks city councillors to give up their pay hike due to COVID-19 pandemic, but Pappas rules council can’t consider idea until budget talks in November

Although Coun. Henry Clarke wanted to discuss councillors potentially relinquishing their 2021 pay increase in the face of mounting municipal revenue losses due to the COVID-19 pandemic, he didn’t get that chance at a finance meeting on Monday.

Coun. Dean Pappas was chairing the meeting and said it was inappropriate to talk about it.

That’s because council compensation will be automatically reviewed in the second year of the term, Pappas said — later this year, in other words — and any changes to councillors’ pay would apply only next term.

It’s a discussion best saved for budget talks in November, Pappas said.

“Though I do believe your motion’s worthy of debate, I do believe it’s inappropriate at this time,” he said.

But Clarke was not prepared to relent: “I think it’s appropriate at this point to get it out there.”

He challenged the decision of Pappas not to allow the discussion to happen Monday, but he was the only councillor who wanted to have a discussion on the matter.

All councillors earned the same in 2019: $32,691.55, plus $600 in internet allowance and their pay increases are meant to keep up with the rate of inflation.

Mayor Diane Therrien earned $104,345.54 in 2019 (her base pay was about $83,000, plus pay for sitting on boards and allowances for her car and internet).

Meanwhile, councillors did discuss a plan to potentially increase taxes by three per cent in 2021, 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 stated 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 driver to collect a fare).

Yet the tax increase could end up being as high as 3.5 per cent: city staff will provide a report later in 2020 on the prospect of seeking up to a further 0.5 per cent in taxes, in case council needs to have matching funds available to access any postpandemic stimulus grants from either the federal or provincial governments.

Pappas, the finance chair, told councillors they should keep this potential tax increase — 3.5 per cent — in mind.

Clarke said he wouldn’t ever support a 3.5 per cent tax increase and Coun. Andrew Beamer said even three per cent was too steep for him.

Therrien said this is a tough budget year, and although this proposed three per cent tax increase “will be tough to swallow” for many, some infrastructure projects cannot be put off to a later date.

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).

Councillors also voted at their finance meeting Monday to set aside $1.5 million of the capital levy reserve next year to start refunding those lost revenues.

City treasurer Richard Freymond explained this was money left unspent from last year and that it will help begin to refund the lost revenues.

Freymond also said he will have a report in July explaining how else council might go about refunding the lost revenues.

No final decisions about the 2021 tax increase were made on Monday. Those will occur during budget deliberations in November.

In the meantime, citizens 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.