City of Powell River’s finance committee was sent a report card on its 2023 budgeting process.
At the February 23 finance committee meeting, correspondence from city resident Paul McMahon was received.
McMahon stated the great news was that there is a one-time city revenue windfall, with the airport timber harvest and Powell River Community Forest contributing significantly to city coffers, along with COVID-19 safe restart funds.
Good news was that the average tax increase for single-family dwellings in 2023 is 4.1 per cent, a modest decrease from 2022, according to McMahon.
Bad news, according to McMahon, is that the seven-year average tax increase in the city is 5.8 per cent and for multi-family units, it is 6.1 per cent for 2023. Also in the bad news category was change requests for additional staff, such as a procurement manager and intergovernmental relations manager.
In McMahon’s hope category is the new term and start for the composition of city council, comprised of 60 per cent veterans and 40 per cent “newbies.” He said there is also a new chief financial officer and there will be a new chief administrative officer.
“The hope is that the blend of veterans and newbies will recognize and react effectively to the fiscal challenges during the current financial planning period,” wrote McMahon.
He stated that major impact events included the Catalyst Paper Tis’kwat mill curtailment and the potential loss of tax revenue of more than $3 million. The consolidated wastewater treatment plan overruns and increased annual operating costs were another major impact event, he stated.
McMahon outlined city spending, which he stated was occurring at an unsustainable rate, plus city staff increases.
“While Powell River’s population increased by six per cent, the number of city employees increased by 34 per cent, from 2012 to 2022,” stated McMahon.
He stated that property taxes are increasing at an unsustainable rate, and forecasted a doubling in 12.4 years, based on a seven-year average increase of 5.8 per cent.
Regarding city debt, McMahon stated that it increased from $24.7 million in 2021, to a planned $43.4 million in 2025, with debt servicing costs averaging $2.8 million in the five-year plan.
McMahan also stated that reserves are ineffectively low, dropping from $51.4 million to $29.7 million in 2023.
“The question is, will council spend the windfall revenue wisely, improving the debt and /or the reserve positions?” asked McMahon. “Or, will council create eight new staff positions, with an estimated annual expense of $800,000, a five per cent tax increase?
“We will soon know if Powell River has a new and effective council, or the same old, same old.”
Finance committee chair Trina Isakson thanked McMahon for his input and for engaging with city council.
