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Campbell River uses pandemic grant, property revenues to reduce tax increase

The new tax increase will be 2.78 per cent versus 2.85 per cent

City council is considering a proposed budget this week that includes a reduction in the tax increase that was arrived at during October’s budget planning meetings.

In October, council had settled on a targetted tax increase of 2.85 per cent but it wasn’t sure how it would achieve that, so it sent city staff away to come up with the necessary cuts to reach that target.

RELATED: Campbell River’s municipal tax rate to rise by 2.85% in 2021

Since then, the province has given the city a $4.6 million COVID Safe Restart Grant and the city also saw an increase in property tax revenues from new construction. With those two new sources of income, staff proposed a new budget that includes a lower tax increase than originally endorsed by council in October. The new tax increase will be 2.78 per cent versus 2.85 per cent.

Council will give first three readings of a bylaw to adopt that budget on Wednesday of this week (Dec. 9), after the Campbell River Mirror goes to press. Watch our website for the latest on that meeting.

Prior to this week’s meeting, council met Nov. 30 and discussed the impact of the COVID Safe Restart Grant and the new property tax revenues and whether to go ahead with the plan producing the 2.78 tax increase using a portion of the Safe Restart Grant and the new revenues.

Council passed a motion to do just that but it did not receive full support from all councillors. Councilors Ron Kerr, Kermit Dahl and Charlie Cornfield voted against the proposal. Those councillors raised a variety of concerns with the plan but generally felt that it was too soon to pass a financial plan and further discussion was needed taking into account the new revenues.

Coun. Kerr, for example, felt that council was being rushed into making a decision about how to use the Safe Restart Grant and he, in fact, made a motion to defer further discussion to a strategic committee of the whole meeting in early in 2021.

It would be “prudent to take a wait-and-see attitude before making any decision,” Kerr said.

Kerr’s motion was defeated, however, with only Dahl and Cornfield supporting it.

Cornfield at one point mused about whether the Safe Restart Grant could be used to offset a tax increase and reduce the burden on the taxpayer.

But Coun. Moglove pointed out that the intent of the grant was to replenish the monies lost from other sources of revenue. For example, one of the series of motions passed as part of this new tax increase authourized the use of up to $725,000 from the Safe Restart Grants to replenish the city’s Gaming Reserve in 2020 from lost casino revenue. That’s what the grant was intended for, she said.

“We asked the (provincial) government to please help us replenish reserves and they have,” Moglove said.

Council discussed a series of 11 recommendations by staff making up a financial plan for the 2021 budget.

One of the motions includes a deferment of further discussions on the rest of the $4.6 million Safe Restart Grants to a dedicated meeting early in the new year to consider use of the remaining provincial grant funding.

A news release containing highlights of the Nov. 30 meeting issued by the city says it “anticipates another challenging year ahead in 2021 and is working to ensure Campbell River is well-positioned to adjust as pandemic unfolds and eventually resolves.”

“With one exception, the proposed plan for 2021 preserves council’s budget decisions made in October, including more than $1.25 million in service cuts – of which $360,200 are permanent cost savings,” the city highlights say. “The proposed budget includes funding to operate the Centennial Pool in 2021 (if public health restrictions allow) as well as $69,000 for a COVID-safe by-election and a significant investment in downtown safety (select committee, matching grants for building and property improvements).

“The proposed plan also includes improvements for Campbellton that include a riverside parklette and wayfinding signs that promote safe, outdoor activity and connection to the river and natural surroundings. These projects are based on conceptual ideas developed by Vancouver Island University students with $10,000 in City funding.”

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