Castlegar city council met via Zoom on Monday, observing social distancing protocols. Photo submitted

Castlegar city council met via Zoom on Monday, observing social distancing protocols. Photo submitted

Castlegar council split over COVID-19 relief

Due dates for utility bills pushed back to July.

Castlegar city council is taking a hard look at the city’s finances and what can be done to help residents while still ensuring the city can meet its own obligations in the face of the COVID-19 pandemic.

During a virtual meeting Monday held on Zoom, staff and council put almost everything on the table and spent hours hashing out ideas. In the end, it was too big a topic to tackle in one night and council opted to come back for a special council meeting some time next week.

At the heart of the debate is balancing lost revenue, ensuring cash flow for things like payroll, projects and services, and the desire to give residents and businesses a break during these trying financial times.

Lost revenue

The city is losing revenue in a number of ways including airport fees and casino revenue.

The West Kootenay Regional Airport is usually self-supported through airport fees. With all flights cancelled at the airport, the fees are not coming in, but some expenses continue. Security and safety must still be maintained.

The city receives 10 per cent of net revenue from Chances Gaming Centre, which is used to offset capital expenditures. The city collects approximately $450,000 annually from this agreement.

The city said it is important to note that the municipality is also a business with customers, employees, revenues, expenses, debt and budgets. And unlike the provincial or federal governments, they are not allowed to run deficits.

Utility bill relief

One topic council had a firm consensus on was utility bill relief.

The city will extend the due date for first quarter utility bills from May 15 to July 15 and waive late payment fees.

The base water consumption amount included in utility bills will increase from 30 cubic meters to 40 cubic meters for March, April and May.

City staff advised against delaying utility bills for an entire quarter because the revenue earned from these services is needed to fund operations including essential services like water and sewer treatment.

Delaying property taxes for the city as a whole is not being considered. Property tax due dates are legislated by the province and so far the province has not changed the rules.

A staff report to council says any change to property tax collection would significantly impact cash flow and hinder the city’s ability to meet financial obligations.

Expense cutting

All councillors were behind cutting expenses, but were divided as to whether the savings should go into reserves to cover lost revenue and provide stability for the city as it moves into unknown territory or be used to reduce property taxes.

Council passed the city’s 2020 budget and five year financial plan months ago with a tax increase factored in.

Staff presented several tax options to council ranging from minor cuts to service levels to major cuts to operating expenses and dipping into reserves. The estimated reduction to residential tax bills ranged from $20 to $80 per property.

Four council members (Florio Vassilakais, Maria McFaddin, Cherryl MacLeod and Bergen Price) were in favour of maintaining the current taxation course while three (Mayor Bruno Tassone, Sue Heaton-Sherstobitoff and Dan Rye) wanted to include a tax cut in the city’s COVID-19 response plan.

Council asked staff to prepare a report for next week’s meeting showing the financial impacts of cutting a number of items from the budget.

At their next meeting council will consider not hiring summer students, removing funding for the city’s 75th anniversary celebration, delaying the hiring of an accounting clerk, postponing a minor capital project and reducing training, travel and meeting expenses by half.

Whatever decision they make, council made it clear that this is just the first phase of their response. City staff will continue to evaluate the budget to look for more savings.

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