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| City of Prince Rupert CFO Corinne Bomben outlined the extensive array of information related to the 2024 Municipal Budget on Monday evening |
Prince Rupert City Council provided for the first glimpse of how the 2024 fiscal forecast might look and with it how 7.7 % in tax increases could be asked of taxpayers as the city looks to providing the funding required for contract increase staffing increases, the cost of energy and work required on the Library the key drivers of the proposed tax hike, along with contract requirements for external services as Policing and Transit.
As well, with Council hearing often of the need to reopen the Fourth Avenue West stairs and walkway, should the public really, wish for that to come to pass, there will be an additional call on the taxpayer to make it so adding another 1.07 percent to the tax bill, more if the recommended Community Enhancement Grant requests are approved.
Corinne Bomben, the City's Chief Financial Officer provided for the financial blue print, walking Council and those viewing at home on the council livestream of the path forward for the year ahead.
The evening opening with a short Executive Summary from City Manager Rob Buchan
Doctor Robert Buchan paid tribute to the work of staff in putting toothier the financial overview and observed of the work done to make cuts towards the final number delivered on the night.
"I would like to start by acknowledging the tremendous work, the hard wor Director Bomben and Deputy Chief Financial Officer Higginson have put into this. And it's not just them but they shouldered the weight of the work. The Directors of the Departments worked very cooperatively to cut a great deal out of the initial draft of the budget, in order to bring it down to the proposal that we have today.
And that's not easy, there's many important thing and good things that we'd like to do for the community for service but we you know are in still a difficult financial position, though I'm happy to say better than last year in terms of the budget proposal"
As for his Overview, the City Manager observed of a few key areas of note to share with the public.
"3.97 % is the labour contracts that we have signed, so that's not discretionary that's something that we have to abide by
We've assigned about .86% towards energy supplies due to inflation.
There's a minor amount for an increase to Library funding of .12%
Policing contract increase is 1.42%
There's a .56% increase for Transit Contract
A .77% increase for staff replacement and 1.5 positions that we feel are important for service delivery"
The City Manager noted of one of those staff replacement issues, observing of the need to fill the vacant Recreation Department Director's post which has been unfilled for a few years now.
"That's been picked up by our Corporate Officer/Director of Administrative and Legislative Services, and it's not fair for one person to take on another Director's Position when there's so much to be done. So it's not viable going forward.
Recognizing the impact in that however, what we're doing in that Department is we're not replacing a recent move in order mitigate the full cost of that. So we've taken a position out of the Rec department in order to minimize the financial impact."
Mr. Buchan also spoke of the need to fill position in Engineering that would work towards asset management and serve to move development processing forward. Another half post in Development Services would also assist in the area of development processing.
He then spoke of the ambitious Capital Spending plans, as well as how the city uses its financial instruments such as CityWest, Legacy and Watson Island.
"The Capital plan in this budget is very ambitious, 140 million only one percent of that is being funded by taxes and that's not new, that's the existing tax contribution that we put in for roads principally. 99% is grant funded and other funded with is a very impressive number, so I think that Council should be very pleased with that.
Inflation 4% that's driving a lot of the upper pressure on the specific cost drivers that I mentioned, we have a 500,000 contribution from CityWest this year. That's been loosely described as a dividend in past years, it's not a dividend it's a repayment of equity that the City put in initially when CityWest was transferred out as a separate company. So that's basically repayment of equity over time and there's some flexibility in how that is paid, we try not to put that into Operations but that's been a challenge.
Legacy, our municipally controlled corporation is contributing 2.122 million dollars in dividends this year and that's helped significantly in keeping taxes and utility fees down"
From that introduction Ms. Bomben observed of the switch from a Spring to a Fall budget and what elements go into the creation of the Financial plan and Budget process. and some of the highlights and changes for the year.
The CFO also outlined the challenges of the water situation in the community and introduced the city's asset replacement project, known as the Boulevard to Boulevard Essential Asset Replacement Project (BEAR project).
"This frequency of breaks is well outside the range of normal and is a direct result of not undertaking systematic planned replacement even during tough economic times in our past.
The increased frequency of breaks, prompted staff to commission an information replacement study to identify high priority areas for replacement which would support our grant requests as well as target funds to the highest risk of failure areas.
The sections in red are those proposed to be replaced over the next three years under the Bear Replacement project, this project will address water, sewer and road infrastructure"
As she notes, Ms. Bomben's financial plan puts much of the weight on Grant opportunities and funding received from the province.
Which is likely why, even if the proposed Roundabout is not the most popular idea floated in the city in many years, we are likely to see it built, if for no other reason that the province is picking up the tab on all the work required underneath it.
"We are still awaiting an answer on our Federal application for funding in the amount of 82 million, should we obtain these funds the red sections on the previous map will be fully funded. This project is giant in scale at 205 million and amounts to 26 kilometres, nearly one third of our underground infrastructure"
As for how much the proposed 7.7% tax increase would mean for homeowners, she observed that using the 2023 Assessed values, that would work out to about 99 dollars for the average homeowner in the city, with 2024 assessed values to be announced in January.
Ms. Bomben also noted of the proposed work on the Fourth Avenue Walkway and proposed increases to Community Enhancement Grants.
"The Budget deficit does not include certain items as identified here, Council can consider to include them in the budget understanding that they would present and additional increase"
The impact of both the Prince Rupert Legacy Inc Fund and revenues that the city gains from Watson Island were part of the documentation.
Ms. Bomben also cautioned against using the dividends to offset taxes and doing so results in a haven penalty in the subsequent year., which could bring a spike in taxes.
"Should a situation arise where funds can't be provided through dividends on a continuous basis. The taxpayers in a subsequent year will have a spike in taxes, they essentially have to fund two years of inflation in one year.
This is why it is best to fund one time capital or special project in items through dividends and why staff do not recommend offsetting inflationary operating increases through dividends"
As to how the City would spend in the year ahead, to their credit there has been some good success found in accessing grants to reduce and in some cases totally pay for the cost of the wants lists from the various departments.
The full list of proposed municipal spending can be reviewed from a slide show presentation that made for part of the night's financial preview,
The items of note for residents and taxpayers to consider, likely consist of the ones that make note of Reserve/Surplus use, Dividend use or taxation as an option.
Those items may be the ones flagged for comment by the public as they review the financial plan and consider whether some of the wants on the list are necessary ones.
Some of the Budget requests that generated some discussion from Council members on the night included
Notes related to the Prince Rupert Fire Department and the services it provides
The work required at the Lester Centre
The plans for additional taxation on the Fourth Avenue Walkway and how it also impacts on the Odd Eidsvik Park improvement project of 2023
Spending on the Street light replacement program
Sidewalk and Paving program work
Landfill site spending
Water infrastructure spending
Spending on the Pool facility
Accessibility spending project
There was also a review of the Community Enhancement Grant options for Council, with a recommendation to retain 2023 levels and not take on additional commitments for 2024.
As for some closing thoughts, Council while for the most part mindful of the tax increase; was accepting of the document up for review on the night.
Among some of their thoughts.
"I look through this budget and listen to everything that's on there, and you know 7.7% increase is obviously something that nobody wants to hear. And I'm sure that everyone could look through that budget and find one thing in their mind that they would rather not spend the money on , everyone has got their priorities.
But just looking look shgourgh this budget it just goes to show you the past and how little was done in this community. And you know here we are now we have a great Civic Centre, a great pool and a great Performing Arts Centre. All requiring work and when those things were rebuilt there was no pipes being replaced and no water lines and no sewer lines and they were building new subdivisions but not replacing the old services
And it's just sad to look at this budget and say there's nothing fun in it, there's nothing fun it and in the nine years that I'be been here, there's nothing fun in the budge and you go back forty years and it was fun, they spent money on fun stuff they spent money on things because they didn't spend money pipes that look like that" -- Councillor Wade Niesh
"I share Councillor Niesh's regret that it's not necessarily a positive number that we're dealing with. I do want to comment on a couple of things I think are worth noting. It identifies 13 million dollars towards underground utilities related to the roundabout. So regardless of one's opinion about what happens above the ground I would like to point out that means were up to 78 million from the provincial government in support of the infrastructure effort and I at least from my perspective I'm appreciative of that.
The other thing I wanted to point out is with regard to those long term debt projections the information on pages 36 to 37. I really appreciate the inclusion of this information its something I asked about maybe around last years budget ... although as we've noted there are payments that are going to be active in the next year or two there are also some payments coming off the books as well" -- Councillor Nick Adey
"What I see in this, you know one of the things that really impresses me is, you know we've got a 7.7% tax increase. But when you break it down just .77 of it, all the rest we can't trim anything of it's contractual, contractual, contractual.
And you know people get raises, they go to work everyday and they want more money and we've got no choice. The RCMP, the Transit, you know PNG, Hydro and everything those are all things that we have no control over I would say. So when you look at the overall 7.7 next to a couple of replacement positions it's down to seven I think you've done an awesome job" -- Councillor Barry Cunningham
Mayor Pond then called on the City Manager to take Council and the public through the amount of cutting that took place.
"We go through a process of looking at services and good things for the community and sometimes fun things, sometimes important things, but can we possibly defer them. When we had the initial number it was 41 percent and then we cut it down and we cut it down and we got it down to just under 20.
And then we sat around the table and we cut hard, it's an unpleasant thing to be doing, especially when there's very good arguments for doing things. But we understand we had a very big increase last year, we've had a lot of unavoidable costs this year.
We're looking at a small number frankly in terms of percentage and actual dollars for some improvements to service levels so that we're not having to wait a couple of months to get a building permit out. So that we can get our documentation together properly for bylaw so we can have our bylaw officers out there doing more bylaw work.
And so that we can actually have a Director of Recreation in place those are important things and we feel strongly about those. But this is your budget, your's and councils' your worship we are here to take your direction" -- City Manager Rob Buchan
For the Mayor his focus was on some of the potential revenue streams that could come along wit a question for the City manager.
"In the meantime we're working on things that may come to fruition. Again, I don't want to hold out false hope, but we continue to work on the Payment in lieu of tax that's outstanding that could make a difference in the revenues next year.
Continue to work on with the province and with the PRPA at our side on the cap is there a way to addressing that cap that makes us whole and still achieves other people's objectives.
If we were to land one or two of those things, I won't even add the RBA that could affect the tax number is that correct?" -- Mayor Herb Pond
Mr Buchan did note how the city was addressing many things at once and observed as to how the infrastructure deficit was significant and went well beyond the current 26 kilometres of pipes of the moment.
He also noted how there was a need to address debt servicing and improve on capital spending in the future to address those issues.
"We're expected to come to the table, this community came to the table in a profound way with a 45 million dollar borrowing bylaw for our immediate project.
We don't have another 45 million dollars of borrowing room. We need those other revenues, so as they come in, the strong recommendation is that they need to go where they need to go which is infrastructure.
Sorry I'm not giving you much hope on the Operational side but as we have success into the future we will get there" -- City Manager Rob Buchan
Mr, Pond then outlined some of the unique instance that Prince Rupert faces that others don't, areas such as the operation of the Airport Ferry, the costs of management of the landfill site how the city requires a sub sea water line to access its drinking water.
"As much as we love our beautiful island ... there are just costs to being where we live right, that drive prices higher. And as much as we work on all of those other components, that's a reality I think that we just all have to accept as residents" -- Mayor Herb Pond
The full Budget Presentation can be viewed from the City's Video Archive.
The twin pieces of documentation from Budget night can be reviewed below:
More information on the Budget process and access to the Budget Simulator project can be reviewed from the Rupert Talks Portal.
There will be two opportunities for public comment to the Budget planning, the first is Thursday night, November 9th at Coast Mountain College in their Multipurpose room that session starts at 7PM.
There's no indication from the city as to whether that session will be live streamed, or recorded for review for those that can't attend in person.
So it likely won't be until the second public input night before we gain a sense of how the public has received the blueprint.
That session comes along on November 14th, that to be held in Council Chamber.
Residents can also submit questions by email to finance@princeRupert.ca or by phone at 250-627-0914
You can review some of our notes related to Budget time from our archive page.
Cross posted from the North Coast Review.
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