The City of Nanaimo is revisiting its 2020 financial planning and looking at ways to ease property tax bills for residents during the COVID-19 pandemic.
The subject was on the agenda at a special council meeting today, April 20, with the city looking at updating a planned property tax increase from 5.2 per cent to 4.5, and then discussing further reductions to 3.8 or 1.0 per cent.
According to a staff report, the provisional 2020-2024 financial plan has been updated and city finance staff is now budgeting for a 4.5-per cent municipal tax increase instead of a planned 5.2-per cent increase. Reasons include changes to estimated costs of benefits, regional district recreation services and RCMP staffing, as well as growth in expected property tax revenue.
City staff are also advising councillors that the property tax increase could be further reduced to 3.8 per cent by accessing $830,000 from the special initiatives reserve and “smoothing” the property tax increase between 2020-21 with a higher-than-planned municipal tax increase in 2021.
A third option is a 1.0-per cent tax increase, which staff reports could be possible by accessing $3 million from the special initiatives reserve and $825,000 from the general financial stability reserve and further increasing 2021’s projected tax hike.
Wendy Fulla, city manager of business, asset and financial planning, said any money from the general financial stability reserve would need to be repaid in a reasonable time frame; the example she gave resulted in property tax implications over four years.
“We just have to be cautious,” she said. “It’s there for a reason, it was developed for things like this, but we walso want to be prudent in how we spend that money.”
Councillors did not make any decision at Monday’s meeting, as they were being given options for future decision-making.
“We just don’t know how quickly the economy’s going to recover and we don’t know what kind of pressure that’s going to be putting on us when we look at our 2020-21 budget,” said Fulla.
The city has until mid May to adopt a property tax bylaw.
The District of Lantzville, earlier this month, discussed accessing reserves to try to lessen a planned 23-per cent property tax hike to around 10 per cent. The discussion was deferred until early May.
More to come.