City councillors have only just started in their new roles, and they’re immediately getting started on guiding a five-year budget for the City of Nanaimo.
Councillors, at a special finance and audit meeting Monday, began four days of deliberations on the draft 2019-2023 financial plan.
The starting point was a 5.03-per cent property tax increase, later revealed to have increased to 5.41 per cent.
Wendy Fulla, city manager of business, asset and financial planning, said the 5.03-per cent increase would equate to a $149 average increase, bringing the total property tax bill to $2,092 for a typical household. The $149 can be broken down to a $100 increase to property taxes, plus increases of $39 to water fees, $5 to sewer and $5 to sanitation.
Some of the drivers for the property tax increase are city staff wages and benefits, policing costs, an increase to the asset management reserve and debt servicing for the $17-million Fire Station No. 1 rebuild and $43-million Harbourfront Walkway work.
“This is not an easy budget to present to you,” said Jake Rudolph, interim chief administrative officer, speaking to councillors. “We’re not happy about the numbers, but it is the reality number that we are bringing to you and we need to break that down and make sure you are as comfortable as you can be with understanding the pieces of that.”
Various city departments have been working on their 2019-2023 budgets since as early as last spring, and were expected to come up with business plans for any departmental budget increases.
Of the city’s $143 million operating budget, 20.7 per cent goes to policing costs. There are plans to add 15 new RCMP members between 2020-2024.
The preliminary budget also calls for seven new staff positions within the municipality including a communications manager, a parking and street use coordinator and a parks and rec special events coordinator.
Fulla said a $2.5 million increase to wages and benefits includes $1.06 million for the new employer health tax.
Infrastructure investment is slated to rise $1.1 million in 2019. Fulla said the city’s 20-year investment plan to address the “infrastructure gap” called for $7 million in project spending per year out of general taxation.
“That never happened. In the past two years, we have not contributed $7 million to projects. In fact, in 2018 we only funded $5.8 million from general taxation,” she said. “This is important, otherwise we’re not going to close that infrastructure gap and we’re going to have to look at other strategies when we do the next update to further close that gap.”
As for the disparity of moving from a potential 5.03-per cent property tax increase to a 5.41-per cent increase, Laura Mercer, manager of accounting services, said it was due to an increase to WorkSafe premiums. Rudolph said he recently learned about a $300,000 increase to premiums this year and said he’s met with other managers and asked for an action plan on a “yellow flag” budget item.
“We can’t change that, but we can change the future of that,” Rudolph said. “I think we need to be aware that there’s got to be some drivers to that, what’s causing [it].”
Rudoph said in general, council will need to approach the budget with “big picture” thinking as far as debt, reserves, asset plans and sustainability, but some things can happen in the short term.
“I think council itself has said something to this effect: it’s a foundation year. But it’s also an action year,” he said. “We fully are in a position to deliver on a whole pile of things and make some quick wins and turning things around. Not to say it’s all been bad, because we actually have a lot of accomplishments.”
Budget deliberations continue Tuesday, Nov. 27 and Dec. 4-5. An e-town hall meeting is slated for Dec. 10, with three readings of the provisional budget scheduled for Dec. 17. User rate bylaws must be adopted by Dec. 31, but the provisional budget can be adopted sometime in January, with final adoption in May.