Positions cut, surplus used to shave 2018 property tax increase to 2.08%

By Spencer Sterritt
April 30, 2018 - 5:04pm Updated: April 30, 2018 - 7:50pm

After discussions and deliberations reached the last possible day, Nanaimo councillors approved a 2.08 per cent property tax increase.File photo/NanaimoNewsNOW

NANAIMO — The 2018 property tax increases is now significantly lower than originally proposed, despite objections from financial staff and some councillors.

Nanaimo councillors whittled the increase down to 2.08 per cent during a special meeting Monday morning, removing three staff positions and using their surplus to pay for projected operational costs.

The moves were made even after repeated warnings from accounting services manager Laura Mercer, who's currently leading the finance department.

“If you reduce the amount you collect from taxes this year, you will need that much more next year,” she said. A staff reported showed a two per cent property tax increase this year meant a roughly four per cent increase for 2019.

The positions for a chief operations officer, manager of treasury and risk and also director of communications were removed, saving nearly $438,000. The communications director position wasn't included in the provisional budget approved in the fall and was re-added in April after lengthy debate.

Coun. Jerry Hong made four motions to use the City's 2017 surplus to fund operations such as snow-removal and the upcoming fall election. His motions, which passed 5-4 along majority lines, moved roughly $401,000 from the surplus to lower the property tax increase.

A motion from coun. Gord Fuller added an additional $50,000 from the surplus to bring down the property tax.

Coun. Diane Brennan called the moves political grandstanding so “in October (you) can go before people and say 'We have a two per cent tax increase when we were scheduled to have a 3.01 per cent tax increase. We're prudent managers, here we are, two per cent, you deal with it next year.'”

A series of late-breaking decisions led to the special meeting, which Mercer said was the last possible day of discussion in order to have their financial affairs in order. The provisional budget was presented to councillors in the fall, rose to 3.18 per cent by early April and later appeared ready for final approval at 3.01 per cent.

However, on April 23 councillors voted 5-4 to send the budget back to staff for options to reduce the final number down to two per cent, despite such a target never being discussed before.

Mercer stressed on Monday councillors need to engage with the budget process from the beginning and make clear their expectations.

“I would hope we can adopt that approach for the 2019 budget so we don't have to have this discussion so close to the deadline.”

The final impact for the average homeowner, including Regional District of Nanaimo, school board and hospital fees, is expected on Tuesday.


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