Last Thursday, the government of B.C. put out a press release detailing new COVID-19 supports for businesses and local governments, and Mayor Don McCormick explained how these new measures will impact Kimberley.
Firstly they’ve authorized local governments to borrow interest free from existing capital reserves to help pay for operating expenses such as employee salaries. For example, this means that the City can borrow from their water or sewer funds in order to maintain essential services.
“Normally you can’t touch that money, the water fund is only for water, sewer fund is only for sewer, and so the province is allowing local governments to borrow interest free from those capital reserves with up to five years to put the money back,” McCormick explained.
Secondly they have allowed for taxes collected on behalf of the school district to not be paid until the end of the year, freeing up that money for cash flow.
Thirdly they also provided local governments with greater flexibility to carry debt over for an additional year.
“We don’t collect taxes until July 1 typically, people pay their taxes in June but we’re operating since January. So we’re operating from January to June with no money and so municipalities if they’re not in a strong cash position they need to bring in what’s called a revenue anticipation bylaw that allows for borrowing to bridge finance until those taxes are collected and this third measure that the province brought in allows for that money to be borrowed for a two-year period as opposed to one year.”
All of these are temporary measure that allow for the freeing up of cash to be able to mitigate the unpaid taxes should the worst case scenario materialize.
However, McCormick explained that in Kimberley’s case, the city is in a very solid position financially.
“We’ve been working really hard for the last five or six years to really get a solid financial foundation in place for the city and as we move into these uncertain times it’s going to hold us in very good stead.”
This means that, because the City is in good shape financially, they are able to substantially keep their projects moving forward for 2020, and in doing so, help mitigate any unemployment issues that would arise as a result of having to let staff go with projects shutting down.
“We get to keep staff which means we’re helping mitigate the unemployment problem not contributing to it. So that’s a very important thing for us to be able to keep our staff on board.”
McCormick added that the other thing it’s allowed them to do is be able to provide additional relief to both the residential and business community of Kimberley within the legislative authority for them to do so, with the actions they’ve already taken.
These actions are the zero per cent variable tax increase, the second deadline for payment of property taxes and the utility rates deferral.
Finally, this means there will be no reduction in City services as a result of any lost tax revenue.
“This is a big deal,” McCormick said. “If we don’t have cash we can’t provide the levels of service that we are providing to the community. And beyond the current provincial health office direction to close recreation facilities we’ve had no cutbacks in levels of service to the community at all. And again it’s our strong financial position that allows us to be able to do that.”
He said that why this is all so important is that there are many municipalities who will be in grave financial trouble if too many of their residents and businesses can’t pay their taxes.
“So all that hard work that our finance department and staff have done to stay within the envelope over the last five years is now paying us big dividends,” he said. “It really is a testament to our finance folks and staff on the job they’ve done over the last five years.”