Tax increase to cover extra snow removal, new staffing costs

City of Terrace made budget reductions, but taxes still set to increase 4.5 per cent

The City of Terrace has reduced a proposed property tax increase to 4.5 per cent, down from 7.4 per cent, in what it is calling a response to the COVID-19 pandemic.

News of the reduction came at a special city council meeting April 23 attended in person by mayor Carol Leclerc and senior staffers and with council members participating via a conference call.

The 4.5 per cent increase works out to about $72 more in taxes for the average household, based on an average assessed home value in Terrace of $300,000.

Lori Greenlaw, director of finance, said the reduction cost the City approximately $380,000 in revenue.

The reduction was achieved by taking $350,000 from the $2.97 million that’s left in a $8.19 million one-time grant received from the province in 2019 and applying it to the planned $1 million project to reconstruct a portion of Munroe St. between Straume Ave. and McConnell Ave.

In doing so, the city then freed up the equivalent amount for operating expenses, thus compensating for the reduction of the tax increase.

The city is also facing revenue loss of approximately $500,000 from facilities closing down due to the pandemic, and it is facing a surprise increase in snow removal costs of approximately $240,000 because of particularly heavy snowfall early this year.

In all, Greenlaw said, the city has cut approximately $700,000 to the 2020 budget.

The city’s administration department, for example, and the fire department each cut $40,000 in training expenses for 2020, for a total savings of $80,000.

But a portion of the $700,000 in cuts is simply the result of the city saving money from COVID-19 related facility closures. One area of savings comes from cutting $125,000 in pool staff wages due to the closure of the aquatic centre.

Greenlaw said changes to the 2020 budget will mean a bigger tax increase next year.

“In order to maintain service levels, and allow our facilities to run at full capacity, all of the budget reductions we have made in 2020, have been added back in to the 2021 budget,” she said.

Prior to the pandemic, the city planned to increase taxes by 7.4 per cent this year, but only 3 per cent in 2021. Now, the tax will increase 4.5 per cent this year and 5.5 per cent next year.

Nevertheless, the city did increase spending in a few key areas this year, primarily with regards to staffing. For example, the city added two firefighters at $280,904, a full-time bylaw officer for $121,884, and a parks supervisor for $89,829.

But one key addition, another RCMP officer, won’t be happening because the RCMP can’t provide someone.

That would have resulted in a savings of $120,000, enough to bring the tax increase down to four per cent but councillor James Cordeiro argued that a portion be used to hire two seasonal by-law officers to patrol the downtown this summer in response to the presence of dirty needles and displays of public disorder.

Those two positions had been in the provisional budget but were axed as a cost saving following COVID-19.

“When the downtown and things do start to open back up again, is this not an opportunity for us having that increased presence in the downtown to get a fresh start?” Cordeiro asked.

Councillors Evan Ramsay and Lynne Christiansen both supported Cordeiro’s proposal, but councillors Sean Bujtas, Jessica McCallum-Miller, and Brian Downie did not support the idea.

“Under the extreme circumstances, I think it’s acceptable to reduce the service we planned to offer this year,” Bujtas said.

Ultimately the tie was broken by Leclerc, who said she was in favour of hiring the part-time bylaw officers thus setting the stage for the 4.5 per cent tax hike.

The city also set aside more than $270,000 to purchase new vehicles, such as trucks and a lawnmower, for its fleet.

Council will officially adopt the final budget in a meeting May 11.

-With files from Brittany Gervais

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