The City of New Westminster scaled back the proposed 2020 tax increase because of COVID-19, but the 2021 hike is still a work in progress.
Lorraine Lyle, the city’s manager of financial services, said the budget considered by city council in February included a proposed 4.9% tax increase, but that was reduced to 3.1% in April as part of the city’s response to the pandemic.
“This was achieved by reducing planned expenditures,” she told council at a Nov. 23 workshop on the operating budget. “This, however, did not take into account any other operational impacts of COVID-19.”
Lyle said the impact of COVID-19 on the city’s operating revenues is expected to be more than $11 million, which includes reductions in revenues from gaming and parks and recreation fees.
Harji Varn, the city’s finance director, said the city’s 2021 budget will focus on core services, capital priorities, climate action, as well the city’s public engagement process for the budget and COVID-19. She said staff have recommended the city take a “responsible and conservative approach” because the financial constraints of COVID-19 will continue over into 2021.
“We will continue to monitor the city’s restartstrategy and prioritizing efforts on the most vulnerable, while we support economic recovery,” Varn said.
Based on an estimated inflation increased on fixed costs and salaries, the city would be starting with an estimated 2.3% property tax increase over 2020, said a staff report. That would be before any COVID-related adjustments are made and any service enhancements are approved.
As a discussion point, staff presented three scenarios for council to contemplate before its Dec. 7 meeting – and some options for coming in with a 3.9%, a 4.9% and a 6.9% tax increase. Each of these options would include the base increase of 2.3%, but variations would be based various factors, including service enhancements proposed by staff.
During Monday’s four-hour workshop, departments outlined their achievements in 2020, as well as their 2021 work plans and service enhancement requests. Departments and COVID-19 task forces have put forward requests for a variety of enhancements, including: $307,750 for the at-risk and vulnerable populations task force (including a two-year temporary, full-time planning analyst); $184,700 for the COVID education and enforcement task force; and $100,000 for the police department related to work on the diversity, engagement, inclusion and anti-racism framework.
As part of the city’s goal of adopting a 2021 budget by the end of the year, council held a workshop on the capital budget and utility rates on Nov. 16 and a workshop on the operating budget on Nov. 23. Council is scheduled to discuss a draft 2021 budget on Dec. 7.
