Pandemic response has B.C. municipalities scrambling to pay bills - InfoNews

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Pandemic response has B.C. municipalities scrambling to pay bills

Kelowna Mayor Colin Basran (left), Stu Leatherdale, Divisional Director of Human Resources (middle) and Jim Gabriel, Divisional Director of Active Living and Culture.
April 06, 2020 - 7:00 AM

The COVID-19 pandemic has brought all kinds of payment deferrals, ranging from electricity to federal income taxes.

But mayors throughout the province can only sit and wait to see if property taxes can be deferred as well.

“What, ideally, we would like to have is one uniform property tax due date right across the province,” Kelowna Mayor Colin Basran told, April 3. “We had a conference call with the Minister of Municipal Affairs Selina Robinson (this week). She said staff were working on some ideas but she can’t give us, right now, a concrete timeline as to when she will get back to us.

“But she does know this is urgent because, as of now, the province is still saying it’s business as usual when it comes to setting your budgets and all of those things and we need to set our final budget here in the next couple of weeks so time is certainly of the essence.”

While a property tax deferral may be good for people laid off from their jobs because of COVID-19, that comes with some pitfalls for municipalities which, by law, cannot run deficits.

At this time, cities throughout the province are looking at ways to cut proposed budget increases.

Peachland, for example, has two projects it is looking at deferring that could cut its projected tax increase by more than two per cent but there would still be an increase.

The District of Lake Country may let residents defer their quarterly utility payments, usually due in May.

Penticton just announced that it's laying off 20 per cent of its staff.

Kelowna is holding off on hiring new staff.

But, without property tax revenue coming in July, some municipalities may have trouble providing services because they can’t run deficits.

“Property taxes cover approximately 35% of the annual operating budget for municipal services including protective services, transportation infrastructure, parks and facilities, among others,” Lake Country Mayor James Baker said in a news release. “Property tax dollars also go towards hospital and school services. Capital projects to maintain critical infrastructure such as water, sewer systems and roads are budgeted and planned for, followed by contracts signed, and scheduled based on the anticipated amounts generated through property taxes. Municipalities, by legislation of the Province of British Columbia, are unable to carry a deficit. Not collecting property taxes within a calendar year is not feasible when the District has a legal obligation to continue providing essential services for the community.”

At this time, municipalities are not asking the province to change the law prohibiting deficit financing, Basran said.

“Right now everything is about cash flow, given that we’ve got property tax time coming up,” he said. “It will be about using, potentially, reserves and we’re looking at asking the province to see if they will give us permission to, potentially, use capital reserves for operating expenses. We’re also doing what we can to reduce our cash flow, cutting down on unnecessary expenditures, non-essential travel and training, we’ve laid off some part-time staff and, as this thing progresses, other, more significant, services may need to be looked into.”

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