REPORTING · 25th April 2013
Kitimat City Council received some bad news on Monday, April 22nd. The five year financial plan was brought before them by Municipal Treassurer Steve Christianson.
“It’s a revenue shortfall,” said Christianson. “We balanced the year 2013 to a 2% tax increase and there is no shortfall because we kind of dipped into reserves. But if you think taxes and costs as increasing by the inflationary average inflation for the past 10 years, 1.84%, we have a shortfall in the revenue of about $10,000,000 over the next four years.”
He explained the reason they have a shortfall is because 4 new positions are coming in, I.T., Economic Development, Project Management and Fire Department and they are built into the plan. There is the return to the PST, an increase to the RCMP Contract for two people, community grants has gone up and the environmental monitoring at the Dump has gone up. This adds up to almost $1.2 million a year or $6 million over five years.
In capital expenditures in the plan, there is the reconstruction of the Haisla Bridge for $2.4 million, Wakashan for $1 Million and the paving of Mountainview Square for half a million dollars. Finally, they have increased spending in recreation projects, building maintenance and the Riverlodge Roof which will be appearing later in the plan.
Christianson expressed what would balance it would be to increase taxes by 8% next year, 7% the year after and 3.5% the year after that. He told Council there were options, but several Councillors wanted to speak.
Two options were to debt finance the two large projects for $3.4 million but they might go to referendum. This would drop the increase in taxes. A second option would be to take some capital projects out. Christianson suggested taking the Wakashan improvements out.
Deputy CAO Warren Waycheshen stated there are a lot of things happening in Kitimat but the community is only seeing the front end. The District has to deal with a lot of issues including planning and social issues. This will result in new assessment but the District will not see any of this assessment until there are some business decisions. He added if these decisions do not go through, the District will have to take another look at their operations.
“All the local taxpayers are being asked to front end those costs that we’re hoping are going to be coming along,” said Waycheshan. “That’s why we’re looking at saying, maybe we’re going to have to defer some of this stuff because if everything is coming down the pipe and we’re having to add some of this stuff to do some of this stuff and still do our projects but there’s still no new assessment there yet, that’s what we’re looking at right now.”
He expressed the new assessment might not be there until 2016-2017.
Councillor Corinne Scott asked if there were funds available from the Provincial Government for communities who were in Kitimat’s position where there is potential development. CAO Ron Poole stated they had promises the Provincial Government would help with money coming out of community services. However, all they have seen is a prosperity fund. Adding to the problem, they do not know what to expect until after the 2013 election.
Poole stated there is one big expense and this is Haisla Bridge. He keeps asking Tim Gleig, Municipal Engineer if it can wait another year.
Councillor Mario Feldhoff stated the challenge is today’s pressure on the community and the potential tax revenue coming in. He suggested going back into the budget to take another look. He did not want to take on debt. He hoped whomever forms government would see Kitimat’s contribution to the Canadian economy.
Christianson stated they have a legal obligation to balance the budget. They could increase taxes and smooth things out over the long run or defer projects. He did not want to defer Haisla Bridge as he felt it was an asset the community would need in the future.
Feldhoff told the Council they would need some time to reflect on what to cut, he likes to be prepared there was no material on this in the Council information package.
Waycheshen said when the time comes, if there is not enough money, they should evaluate there operations over an 8% tax increase, pointing out this would mean projects are not going ahead. He added if this happened, the Council would have to make the hard decisions, the same kind of decisions which they made when Eurocan went down.
He added an 8% tax increase is not the intention, but this is the way it looks.
Scott stated she did not feel good about this discussion because Council was going to be asked to give pre-budget approval for the roads program. She added they need the increase in personal. She was not in favour of requiring an 8% increase. More assessment would take care of it. Scott asked how much longer they can put the bridge repairs off and if they can grade the Public Works Yard.
The deadline is May 15th when it has to be into the Province. Christianson needs to finish this so he can finish the taxes for this year.
Poole stated they are going to have to do a serious review in 2014. “Let’s use the Haisla bridge as an example. We’ve wanted it every year, we’ve expected the Province to step in, we didn’t get the grant patching it this year. I’m somewhat aware of the opinion: ‘Let the damn thing fall down’ and eventually it will be an emergency and they will fix it themselves. It really throws us down that we are not getting taxes at 2.4 million I believe and we may have to foot the whole bill and right now some of the projects will not be paying into the bridge as it develops so it is going on the backs of someone,” said Poole.
He added they might have to do some shuffling in the future.
Feldhoff stated it would be irresponsible to let it fall and create an emergency. Scott stated Council should take out the parking lot at the Public Works Yard. Acting Mayor Rob Goffinet asked for advice, whether they could schedule a meeting in the next week to come to grips with the 5 year plan.
They determined it would happen at a special meeting on the 29th, a Monday. Scott asked the department heads to consider possible cuts for the next 5 years. Goffinet pointed out a five year plan can change in any year possible. The motion was called and carried.
Councillor Phil Germuth had a question which he had put off since the beginning, that the shortfalls do not take the reserves into account. He was told they did not.
Where is our TAX Dollar
Comment by Leon Dumstrey-SooS on 29th April 2013
It blows me how COUNCILS and Administrations poor fiscal planning is undermining our community's financial stability.
Instead of taking the step back and reset their fiscal thinking, they manufactured shortfalls and at the same time have limitless apetite for spending in advance, while you are asked-for example- to look after the sidewalks(what a joke) and who knows what their next "brain child" will be.
Perhaps it is the time for an AUDIT!
Comment by Gary Haupt on 29th April 2013
Indeed, perhaps a ``misunderstanding`` has occured. I have spoken with one of the two questioners and he is of the opinion that HE had asked about the status of the currant crossing. That was in conjunction with a question about who and why the surveyors were down at the bridge site. There is no doubt the questions were asked, and no doubt that there was a reluctance on the part of the representatives to properly address the question.
Or, perhaps Mr. Waycheshen misunderstood the question.
Comment by J. Cruijff on 25th April 2013
Councillor Feldhoff has not disliked any taxdollar for his little expensive projects.
I suggest that when the windfalls of LNG, Enbridge at al come to fruition then we should be ready to jump to these projects. Until then raping surpluses from accounts to satisfy expenses, looks to me that we were/are over taxed to begin with.
Comment by phil germuth on 25th April 2013
In defense of our Deputy CAO Warren Waycheshen and our CAO Ron Poole , regarding the bridges I believe there was a misunderstanding.
At the public forum meeting Tuesday April 23 there was talk about our current Haisla Bridge and a potential new bridge somewhere in the area of Methanex.
The Haisla Bridge has been on the radar of The District for a number of years as it is in need of repaint and other maintenance. There were also several questions Tuesday Night about surveyors being seen near the bridge and what their purpose was. At that time neither Mayor and Council nor our administration knew what was happening. Working in service centre every day I also noticed and had several customers come to my business and ask if I knew what they were doing.
At the meeting it was mentioned that the District would check into it and they did. The surveyors were not there for anything to do with the bridge but were there for a totally unrelated project.
I believe the bridge mentioned that was not 'on the radar' was in relation to the possible second crossing. At the Monday night council meeting Citizen Bill Kearley gave a presentation proposing a second road starting from close to the Kitimaat Village road and going to a second bridge crossing near Methanex. The presentation included ideas for growth of our City center, Strawberry Meadows , Service Center and a possible camp location close to the industrial area. This was a much more detailed presentation than he gave at the Tuesday night meeting.
While my response definitely does not address all your concerns I hope that regarding the bridge issue , it makes things a bit clearer. Thanks Gary.
8%? Maybe its time to move........
Comment by Larry Walker on 25th April 2013
Don't spend it, if you haven't got it. Sure there are some "big projects" coming down the road but until they actually start building...it is nothing but smoke and mirrors. The town hired four new positions? Based on a preceive need (wish list) or an actual requirement (cut the grass - clean the roads). Have we now got an assistance to the assistant CEO? Just asking''
Comment by Gary Haupt on 25th April 2013
Mr. Warren Waycheshen, Deputy CAO, while chairing the Public Forum meeting on the evening of April 23rd was asked by several speakers specifically about the bridge and was not forthcoming with his response. His words and comments left the public with the impression that the bridge was not on the radar of The Distrct at all. And yet..we now read in the posted minutes of Council on APRIL 22nd..the day before the Public Forum, that in fact, the brdge is very much in front of the District. In the Council discussions. Mr. Ron Poole, CAO, repeated 'street comments' suggesting that it's replacement be delayed, or perhaps just allow the exisiting span to collapse, then the province would have to look after it .
One is left to wonder then....if the two District reps on the stage at a PUBLIC FORUM were prepared to obfuscate on the subject of the bridge...what else were they NOT forthcoming about? And...might I mention...the mayor and some council members and Ron Poole were present in the audience section and not one of them stood to clarify or in any way, contribute to the process.
And please...don't tell me about protocol....it was alright for a PTI VP to rise on several occasions to defend their pet project.
Just so I understand this correctly...The District is taking a wait and see position on the Bridge? I'm sorry...but is there another route to the existing 'projects'? Because there must be a liability factor in play, here. Would not the District of Kitimat be liable to these projects if they knowingly allowed the Bride to fall into disrepair? Perhaps even collapsing.