Nanaimo councillors are getting a line-by-line account of the city’s financial plan as they prepare to make budget decisions over the coming weeks.
The first of a series of special finance and audit meetings was held Wednesday at the Vancouver Island Conference Centre, where City of Nanaimo staff told councillors that the projected budget increase has risen to 5.6 per cent.
A previously released draft showed a 5.2-per cent increase, but Wendy Fulla, manager of business, asset and financial planning, said the city has since added new rates for WorkSafe B.C., employment insurance and Canada Pension Plan. The municipality is also awaiting information about new rates for pensions and extended health benefits.
“We do anticipate those will impact the property tax rate,” Fulla told councillors.
The city’s budget is approximately $200 million, Fulla said, adding that departmental budgets are calculated from scratch each year and aren’t based on the previous year’s budget.
“The budget process is really about how much does it cost and are we working effectively and efficiently in the service delivery,” said Jake Rudolph, chief administrative officer. “Unfortunately we often get caught up in the per cent cost increase of the taxation rate and that type of thing, but the reality is there’s a lot that goes into this.”
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Fulla said a 5.6-per cent tax increase, combined with increases to water and sewer user fees, would mean an additional $166 for a typical home.
She highlighted a few budget drivers. A $2.9 million increase in wages and benefits, she said, includes the new CUPE contract, increases for management and council, contingency for firefighters’ union dealings, new staff positions proposed in the budget, and impacts from recent management restructuring.
The budget also adds $1.7 million for RCMP, which includes the overall policing contract as well as the first three of 15 new officers being added to Nanaimo’s force.
There is $466,000 budgeted for economic development, which includes a manager of economic development and funding for a to-be-determined implementation strategy.
The only external borrowing added to city debt in 2020 is $3 million toward the Fire Station No. 1 re-build. Staff noted that the city’s debt in 2019 was at 11 per cent of its liability servicing limit, much lower than some comparison municipalities such as Kamloops (27.3 per cent), Kelowna (45.4) and Prince George (41.1), but a little higher than others including Victoria (9.7) and Saanich (10.1).
“Relative to our asset base, the city’s borrowings are very small indeed, unlike most Canadian households and other levels of government…” said Mayor Leonard Krog. “The finances of this city are handled very competently … including previous councils, in terms of keeping that limit for borrowing. One may argue that we should have been spending more on capital expenditures, but at the end of the day, it’s very conservative.”
Rudolph also praised the work of the city’s finance department.
“Fiscal management … is a fundamental part of the economic health part of your strategic plan,” he told councillors, “and it is an underlying, important piece that I know council and certainly the citizenry are mindful of in terms of being seen to do and actually doing good fiscal management.”
Special finance and audit meetings are also scheduled for Friday, Nov. 22, as wll as Nov. 25 and Dec. 2. A budget-focused e-town hall meeting will happen Dec. 2 at 7 p.m.