Nanaimo councillors grappled with major financial decisions from afar during a special meeting on Thursday, April 9. (City of Nanaimo)

By Ian Holmes

cash crunch

User rate payment deadlines extended as COVID-19 financial fallout comes into focus for Nanaimo City Hall

Apr 9, 2020 | 3:36 PM

NANAIMO — Payment deadlines for user rate bills will be extended for all property owners.

Nanaimo city council on Thursday, April 9 unanimously endorsed allowing property owners pay their user rate bills in 90 days after receiving them, instead of 30. User rates for water, sewer and waste collection are paid three times a year.

The five per cent discount for early payment will be extended accordingly to the new 90 day deadline.

Shelley Legin, the City’s general manager of corporate services, addressed the potential of property tax deferrals during the special council meeting. She said it’s up to the province if any additional deferral options can be used.

Currently, deferrals are only available in B.C. for property owners over 55 with a certain amount of equity and for families with children.

time served

Nanaimo man caught with over 30g of illicit drugs avoids additional jail time

3h ago

big return

Senior women's box lacrosse returns to Nanaimo after 10+ year absence

3h ago

environmental impacts

Accidental pump activation causes minor oil slick in Nanaimo marina

5h ago

Legin said if the province doesn’t alter the property tax deferral rules, options will be presented to council at a later date.

“We could have a one dollar tax penalty on July 1 for non-payment and then move to Sept. 1 where we could have eight per cent and Nov. 1 could be two per cent,” she suggested.

Legin said municipalities throughout the province are mandated to charge a 10 per cent penalty on property taxes not paid by the end of the year.

Council has a preliminary budget increase of 5.2 per cent, which Legin anticipated will be approved on May 11 following further analysis by staff and council.

Legin said additional measures are under consideration which would affect the budget, such as boosting their grant distribution so non-profit organizations can re-open quicker to help spur economic activity.

City Hall officials confident

Councillors heard during Thursday’s meeting how the COVID-19 pandemic is impacting the City’s finances.

Legin reported a mix of good and bad news as she laid out various scenarios.

A $3 million shortfall is anticipated if City facilities remain substantially closed for the rest of the year.

Losses were pegged at $2 million if facilities like pools, rinks, the casino and community centres re-open on July 1.

Council gave partial approval to gaining access to a $50 million fund should the City run into cash-flow challenges over the next few months.

City staff described the fund as a safety valve to meet lawful expenditures if collecting taxes becomes challenging at this uncertain time.

A final vote to officially be able to leverage the fund is expected on April 20.

Legin said the situation looks more positive in the beginning of next year.

“A further $73 million dollars in long-term investments become available to us with respect to due dates. We are in a strong cash-flow position with the $50 million well into 2021,” Legin said.

Mayor Leonard Krog hoped the public doesn’t get caught up in headlines of the City borrowing $50 million.

“This is simply to allow us to have the money in the bank to meet payroll, to pay our contractors, to pay our expenses, it doesn’t mean we are going in to debt.”

A report from finance director Laura Mercer said debt servicing costs would increase and future tax rates could be impacted if the $50 million fund is accessed.

The City won’t be penalized if the fund isn’t accessed.

Nanaimo councillors attended the special council meeting remotely through a video conferencing feed.

Mayor Krog and senior administration where spaced apart at the Service and Resource Centre’s board room in front of an empty gallery.

ian@nanaimonewsnow.com
On Twitter: @reporterholmes