At the regular meeting on Tuesday, April 14, City Council will consider options for a zero per cent municipal tax collection adjustment for 2020.
At the April 6 special budget meeting, council approved changes to the 2020 base operating budget that necessitated a 1.35 per cent increase to the 2019 municipal property tax collection. However, since then Kimberley’s Chief Administrative Officer requested a report be prepared to discuss the consideration of reducing the 2020 municipal tax collection adjustment to zero per cent.
The purpose of this would be to provide some financial relief to property owners who are experiencing financial strain due to the COVID-19 pandemic and the resulting economic issues.
The above-mentioned 1.35 per cent increase would result in revenue of $139,559 this year. Reducing it to zero would mean that either previously-approved operating costs would need to be reduced by $139,559 or an alternative source of revenue would need to be found to replace that number.
Council will discuss four options for how to achieve that target.
The first would be to review adjustments to the 2020 general operating base budget presented at the special budget meeting, and, if possible reconsider their approval for inclusion in the 2020 to 2024 Financial Plan Bylaw.
The second option is to have council provide direction to city staff to identify ways of reducing service levels to save the city $139,559 this year.
Thirdly they will consider transferring that amount from past years Accumulated General Operating Surplus to fund general operating costs that would have been paid for with the 1.35 per cent tax collection increase. Previous direction from Council results in 50 per cent of the excess of general revenue over general expenditures in any given year being directed to the Accumulated General Operating Surplus to a maximum balance of #1.35 million, with the remainder being transferred to the General Operating Capital Reserve.
The balance of the Accumulated General Operating Surplus is currently at the established maximum of #1.35 million and as it is accumulated surplus, these funds are not earmarked for anything in particular and are available to fund unanticipated general operating expenditures.
They could also consider an option that combines the previous three.
“Unlike provincial and federal governments, local government has the least amount of flexibility in being able to provide any kind of financial latitude to our taxpayers,” Mayor Don McCormick said.
“The only thing we really have the opportunity to do is to defer certain payments, but it is a deferral which means that entire amount is owed sooner or later, so unless someone has extreme cashflow difficulties in the short term, it’s not advisable to defer because the bill just keeps getting bigger. So it will work for a select number of taxpayers but certainly not for everybody.”
The Council agenda acknowledges that while these are unprecedented times and that it would seem prudent for the City to do what it can to limit the financial burden that the 2020 property tax bill would place on property owners, council “can’t lose sight of the future impact that these measure will have on those same taxpayers.”
A zero per cent municipal property tax adjustment in 2020, combined with previously approved financial relief measures would require an estimated municipal property tax increase of more than five per cent in 2021. It would also include an Aquatic Parcel Tax increase of roughly $22 next year to fund services at the level anticipated prior to the adjustments being made.
A rough estimation of the impact of these adjustments on the taxes paid by an average single family residential home owner would combine to about $140.