Campbell River city council has set next year’s municipal tax rate increase at 2.85 per cent and now it’s up to staff to propose options on how to make that happen. Photo by Mike Davies/Campbell River Mirror

Campbell River city council has set next year’s municipal tax rate increase at 2.85 per cent and now it’s up to staff to propose options on how to make that happen. Photo by Mike Davies/Campbell River Mirror

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

After three days of talks, council sets tax rate increase and tells city staff to make it happen

After three days of budget deliberations this week, Campbell River city council has determined that next year’s municipal tax increase will be set at 2.85 per cent.

They’re just not entirely sure how they’ll accomplish that yet.

Going into the planning meetings, the proposed budget already had many cuts made by city staff, but council still wasn’t pleased with the proposed tax increase, which was set at 3.15 per cent, mean the average homeowner – someone having a home with an assessed value of $442,000 – would see a tax increase of $86 next year. A business valued at $732,000 would see a tax increase of $261.

That tax rate actually rose throughout deliberations, despite the cuts council was attempting to make as the process went forward. On the third day of the discussions, however, when the proposed tax increase had risen to 3.56 per cent, it was clear that council wanted to get the tax increase down and had all but run out of options on how to do it. There was some discussion about rolling some of the city’s gaming reserves into the base budget or to fund ongoing services that would be otherwise paid for with tax dollars to bring the tax rate down, but most on council felt that was just delaying the inevitable.

“It’s an artificial solution,” Coun. Ron Kerr says. “It’s not sustainable an it makes us feel like we’re moving ahead when we’re not. Doing something like (using gaming revenue) is not getting to the root of the problem. We need to look at our base budget and start cutting, not to look like we’re doing something when we’re actually running on the spot.”

Coun. Kermit Dahl agreed.

“By using gaming funds, we trick ourselves into thinking we can afford things that we can’t,” Dahl says, also expressing his disappointment in what council was presented with by staff in terms of a preliminary budget.

“I think that during the Committee of the Whole meetings that we had leading up to these deliberations, we, I thought, made it fairly clear what we would be looking for.”

Coun. Colleen Evans suggested that council could do both: use some gaming revenue to pay for some services and also make more cuts.

“I don’t see this as an either/or,” Evans says. “We’re trying to be creative and find where the resources are that we can use to pay for things. I think this is a valid motion to consider.”

Coun. Michele Babchuk pointed out that the preliminary budget already had $1.1 million in cuts made by staff, some of which were actually permanent reductions.

“Everything that is on (the budget) has validity,” Babchuk says. “I’m not sure where to cut anymore, and I don’t know if staff even knows where they could cut any more.”

Mayor Andy Adams saw the direction things were headed and proposed a motion that would see staff return to council with a budget that they could stomach.

“Council is trying to ask questions and dabble around back and forth as far as where money can come from, and we don’t seem to be getting anywhere,” Adams says, proposing that council settle on what they want the tax increase to be and send city staff away to find a way to make it happen.

Council agreed with Adams’ proposal, and staff will now have until No. 30 to prepare a budget options that fit the 2.85 per cent tax increase parameters set by council.

“At the end of day one, I went around and asked council where they wanted to end up, and everybody was pretty candid with what their individual agenda was coming in,” Adams told the Mirror after deliberations had wrapped up. “When I saw where the discussion was going and realized it could have become very complicated and painful, I threw out the number and said, look, rather than council pick off these things one at a time to get down to the number we want, let’s just pick that number and refer it back to staff.”

Adams says next year is especially difficult to budget for, as revenues have declined, costs have increased – as they always seem to do – and there’s a lot of uncertainty going forward.

“Particularly this year, more so than any other year, there are tough calls on things we’d love to do,” Adams says. “In addition to not being able to do all the things that staff would like to do, or what staff are proposing because they’ve heard from the community what they’d like to have done, we’re not only not able to fulfill all those requests, but have also made the decision to go and sharpen the pencil and cut some more.”

Adams also acknowledges that while people don’t like hearing that their taxes are going up incrementally year after year, the alternative is to have “spikes” that hurt even more.

“We know that people are hurting, but when you’ve got collective agreements that are running at two to 2.25 per cent annual increases, that’s gotta come from somewhere,” Adams says. “If you’re not keeping pace, all you’re doing is deferring that to a future council or a future year and you’ll have to make up that difference sooner or later.”

The revised budget is scheduled to come back to council at the Nov. 30 meeting for consideration of staff’s new recommendations and final approval.

RELATED: Campbell River to review financial situation in light of COVID-19

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