New Westminster may still be weathering the impacts of COVID-19 but it’s aiming to get back on track with some of its priorities in 2021.
On Feb. 8, council approved a motion directing staff to prepare the 2021 to 2025 financial plan bylaw, which incorporates a property tax rate of 4.9% for 2021 and a $183.3-million capital budget. Staff will present the bylaw to council for three readings and adoption on Feb. 22.
Mayor Jonathan Cote said the city has done its best to “weather the storm” of 2020, which impacted some of the city’s revenue streams. Because of COVID-19, he said the city had to adjust its plans and postpone work on some of the initiatives it had hoped to start in 2020.
“Overall, when I look at this budget, I think it is a responsible budget that helps continue to manage us through the difficult times that COVID has had … on our community,” he said, “but it also allows us to get back on track with a lot of important work we are doing, both with our strategic plan and our seven bold steps for climate change.”
Cote said the draft 2021 to 2025 financial plan provides the “right balance” of allowing the city to continue working its way through the impacts of the pandemic and resuming work on initiatives like the Canada Games Pool replacement project and climate change initiatives.
Harji Varn, the city’s director of finance, said the city’s five-year consolidated financial plan advances council’s eight strategic priorities and seven bold steps on climate change, maintains core services as the city works its way through pandemic, aligns with feedback from the community and incorporates council feedback.
According to a staff report, the proposed 4.9% property tax increase includes 2.3% to support fixed cost increases for all city services, 2.0% for debt financing related to the Canada Games Pool replacement project and 0.6% for service enhancements.
The report states the estimated dollar increase to average residential and business properties is: $65 on a strata unit; $251 on a single-family home assessed at $1.2 million; $112 on a single-family home assessed at $2 million; $383 on a business assessed at $2.8 million; and $3,402 on light industry assessed at $5.2 million.
In November, council approved rate increases for the city’s four utilities: sewer (7%); water (7%); solid waste (12%); and electrical (3.8%, which includes a climate levy).
“Not out of the woods”
“For 2022 to 2025, finance has utilized the reserves and some borrowing to smooth or stabilize the rates for the next five years,” Varn told council. “So overall, our budget outlook is estimating a property tax rate increase of approximately 4% to 5% per year, a sewer and water rate increase of approximately 7% per year, solid waste rate increases of approximately 10% per year and an electrical rate increase at 2.8% per year.”
Varn said the city is “not out of the woods yet” with the COVID-19 pandemic and must continue to seek out stimulus and partnership opportunities, carbon tax credits and strategic procurement strategies.
Lisa Spitale, chief administrative officer, said the finance director has recommended having staff provide quarterly budget reports to council.
“If revenues are either coming in higher or lower than we are forecasting it, that is where we would inform council and the community,” she said. “And if we have to look at refinements, that is the best process for that.”
According to a staff report, the general fund operating expenses total about $138 million in 2021, which provides services such as police, fire, parks and recreation, engineering, development services, library and cultural and administrative services.
Because of COVID-19, casino, Anvil Centre and parks and recreation programming revenues dropped in 2020. Staff don’t anticipate revenues to return to pre-COVID levels until 2022.
Big capital plans
Varn said the city’s $470.8-million five-year capital plan includes a variety of initiatives related to: infrastructure and core services ($331 million); environment, climate and sustainable transportation ($106.5 million); organizational effectiveness ($20 million); affordable housing ($9.3 million); and culture, economy and reconciliation ($3.5 million.)
This year’s $180.3-million capital budget includes a combination of projects that were deferred in 2020 because of COVID and city projects already planned for 2021. The city is forecasting to spend this money over two years, with $116.2 million projected to be spent in 2021 and $67.1 million to carry over into 2022.
While a wide range of projects are included in this year’s capital budget, three of them are multi-year projects totalling $111.3 million: $84 million for the New West Aquatic Centre/Canada Games Pool replacement project; $17.5 million for the Queensborough substation/electrical grid project; and $9.8 million for automated electrical meters.
Varn said the city will fund the $470.8-million five-year in a variety of ways: reserve funds (53.3%); debt financing (37.4%); and third party, external or developer contributions (9.2%).
“There’s a full foot on the gas pedal, I guess you would say, to find some successful application for partnership funding,” she said. “And in 2021, the finance department will review the health of the reserves and propose some targets for council to support.”
Varn said the city is relying quite heavily on reserves and debt, which could put some strain on the city, but the projects being proposed are all important projects that will serve the community for generations to come.
City staff are aiming to complete a comprehensive review of the city’s reserves in time for the 2022 budget process.
Coun. Chuck Puchmayr said the proposed budget is “really responsible” in that it reflects input received through the community engagement process and allows the city to move forward with much-needed infrastructure, including the Canada Games Pool replacement project. If the debt financing for that facility is removed from the budget, he said it would be a “fairly small” tax increase in 2021.
Nearing the finish line
Last fall, the city launched the 2021 budget process last fall with an online Budget 101 session and survey and three special workshops with council. The plan had been to incorporate a best-practices approach and adopt the budget by the end of 2020, but approval of the budget was delayed while council considered whether to require the police department to bring forward a budget with a 0% increase.
At the Feb. 1 council meeting, council voted five to two in favour of supporting an increase to the police department’s budget, which includes items such as wage increases from the collective agreement and service enhancements related to work on the diversity, equity, inclusion and antiracism framework. In response to calls from across North America for police reform, councillors Nadine Nakagawa and Mary Trentadue voted against the police budget.
“As I didn’t support the police budget last week, I am wondering how do I manage that in this discussion and in further discussions regarding supporting overall budget,” Trentadue asked at the Feb. 8 meeting. “Is it possible to pull out a police budget? Am I voting against the entire budget?”
Cote said council members can vote against the budget even if they don’t support one line in the document, or they could support it but make it clear that they don’t support some aspects of the budget.
“We are not going to be breaking up the budget into departments or different areas,” he said. “We will be voting on it as a whole.”
Trentadue and Nakagawa voted against the motion directing staff to prepare the financial plan bylaw.