REPORTING · 20th December 2009
At the Committee of the Whole meeting Monday, November 30th, Kitimat City Council looked at what their future budgets might look like if Eurocan closes it’s doors at the end of January 2010. Municipal Manager Trafford Hall presented the potential Financial Snapshot.
“First of all, we want to get a handle on how big it is so council can start thinking about wrestling it. What we found is that our expenditures are going to go up a bit for known shocks. […] We took a look at our revenues and the known shocks in our revenues. Our best estimates right now, and things will change as we know more about what Eurocan’s going to do, and what assessment we will lose. Right now we‘re estimating. Our best estimate is that our expenditures will be 2.7% next year over next years. That’s with the same level of service. But it’s in 2011 of course that the big shock comes because next year, we will continue to have the full assessment of the Eurocan Plant,” said Hall.
He explained that because Eurocan did not announce their closure until late October, they have to pay their taxes for the next year. Hall expects a $4,000,000 loss in taxes. One of the major shocks is the pool debt repayment coming in at $475,000.
Hall explained that the city will need $4,600,000 in 2011 and council will be looking at cutting services or raising taxes. Chances are, they will be looking at both. He started suggesting places where they could cut. He suggested that they consider long range service reductions or restrict capital projects temporarily.
As an example, Hall suggested cutting back on snow removal. It would involve not getting rid of the snow until it was 3 inches deep on arterial roads and 5 inches deep on residential streets, with no over time on residential streets.
“The town continues to run. Everyone can make it to the bus stop. All your utility vehicles can get around, but the guy in the Civic with the summer tires, which is Kitimat standard now, cannot do it. He’s going to have to wait like in every other town,” suggested Hall.
He advised council to hear all the options and consult with the constituents of Kitimat prior to making any decisions on this. He also suggested that council works to keep Eurocan or a part of Eurocan going. He concluded his presentation.
One of the recommendations was to pass a budget by the end of February. Councillor McLaren asked about this. Hall replied that this was doable although it would be difficult, and they would not have year end figures from 2009. Councillor Mario Feldhoff thought that these discussions on how departments could be changed to run differently should be done earlier.
One idea was to ask the Provincial Government for a definitive answer on having them take over Haisla Boulevard and that having an answer on this prior to budget would help them along. Looking at the No-Layoff Clause in the union contract, he suggested, without laying anyone off, looking at how things can happen differently in the future.
Hall stated that they have been looking at these sorts of things and that there will be many open positions at the District of Kitimat in the future because of retirements. The problem is, Kitimat is at the end of the road and people do not come to the community simply for the weather.
Hall added that if they can get rid of the debt and the responsibility for Haisla Boulevard, then they will start to close the gap between Eurocan’s taxes and the amount that the taxes will increase should the mill close.
If council cannot find ways of bridging the gap between what Eurocan pays in taxes and their budget, then the average taxpayer can expect a 29.7% increase in taxes.
A motion was made to receive the information. It was called and carried.