Thursday, December 13, 2007

45 minutes of talk, but still the rates will go up

Fears of a double whammy on Podunkian taxpayers ruled the debate on Monday night, but in the end Councillors Thorkelson and Briglio stood alone in discussions that examined the idea of holding the line on the upcoming water and sewer rate increases.

However, by the end of the night’s debate city staff had seemingly convinced Briglio and the remaining councillors, as well as Mayor Pond that the five per cent request for 2008 was a much needed injection of finances for a city struggling with its infrastructure.

Apparently not inclined to investigate other options in finding the funding for infrastructure, council chose to just hit the cash machine yet one more time, adding five percent to January’s cash call of taxes.

The final tally on the tax increase was a 3-1 vote, with only councillor Thorkelson voting in the negative. Councillors Gordon Payne and Bedard were joined by Briglio in passing the measure, while Councillors Cote and Kinney were absent from the nights festivities.

For those looking for some pre bedtime reading material, the unofficial minutes of the council session were posted to the city's website (see here)

The Daily news featured the developments of Monday night as their front page story in Wednesday’s paper.

Water and sewer rates set to rise by five per cent as city seeks vital funding
By Patrick Witwicki
The Daily News
Wednesday, December 12, 2007
Pages one and three

It took a heated debate that lasted for well over 45 minutes, but in the end, Prince Rupert City Council decided to raise the cost of water and sewer rates by five per cent for 2008.

The hike means that the residential water, sewer and garbage bill for a single residential house will increase from $847 in 2007 to $876 in 2008. The bylaw also outlined an increase for 2009 and 2010.

The debate that arose two weeks ago when the bylaw passed its first three readings came up again, as both Councillors Joy Thorkelson and Tony Briglio, questioned whether raising the water and sewer rates yet again was a good idea, considering the still-recovering economic climate of Prince Rupert.

“My gut feeling why to oppose this is… we don’t know what the tax rates are going to be, and I don’t think people need to have a double whammy,” said Thorkelson.

Briglio asked if there might be other methods for the city to find revenue to deal with potential problems such as the waterline break on Fulton Street in the spring of 2007.

“We need to find revenue,” he said.

“We could choose to fast-track this and starve ourselves, or we could say ‘look what’s coming,’ and let’s ear-mark it.
“Let’s not continually go to the well when its already run dry. We can afford now to wait.”

But city staff did not agree, and said that currently, they have no other option but to raise the taxes.

“Both the water and sewer fund themselves,” said Gord Howie, chief administrative officer. “It’s not an easy thing to ask of council… but these utilities are inn a deficit.”

Howie added that the rate increase is in reality only 50 per cent of what revenue is actually required for water and sewer services. He also said that preliminary estimates regarding property assessment could go up by 11 or 12 per cent, but the city will not know the exact numbers until the New Year.

The city’s Chief Financial Officer said that the rate increase is small compared with the potential and actual costs the city faces in providing the services.

“The absolute dollar amount is not that high,” he said. “That Fulton Street (incident) was half a million, and it only takes one of those every two years to wipe out those funds.

But Thorkelson echoed Briglio’s comments when she said that the city needs to find a way to build up those reserves so they don’t have to keep raising water and sewer rates every year, considering that property taxes will also be going up in 2008.

“It’s hard for me to divorce this from the discussion we have to have regarding taxes,” she said.

“That’s what my problem is. We need to be putting money back into the reserves.

“If we’re going to be putting money back into the reserves next budget and replenish those reserves, therefore that should be enough and you shouldn’t have to raise taxes.”

Briglio added: “We do not want to get to a point where we’re not only the highest in taxes, but also in sewer and water. How much would we have to pay for water when you could put a bucket outside and use it?”

But Rodin said that the money for those reserves just isn’t there.

“We’re pulling 3.9 million into reserves just to balance the budget,” he said. “We spent nine million that we didn’t have that we have we have to pay back.”

Mayor Herb Pond pointed out that the escalating costs all over the province have also contributed to the need to raise the rates.

“Most of the work is construction work, and the cost has gone up eight to 10 per cent the past few years (every year),” he said “You’re going to need eight to 10 per cent more to get it done.”
Coun. Sheila Gordon-Payne added: “This is not even keeping up with the cost of living. When we have money rolling around, we can look at it, but right now, we (have to) do this.”

Briglio, aware that the vote was going to pass, suggested that in the future revenue for utilities gets separated into either ‘operating’ or ‘maintenance’ costs.

“Let’s understand what part of this fund should be maintenance, and what should be the operating costs,” he said.

Howie added that prior to 2009, council could vote to rescind the planned rate increase for that year.

“At any time, council can rescind the bylaw,” he said. “We don’t know precisely what the assessment rate is going to be. Some councils do their rates ahead of time, and then adjust accordingly.”

In the end, the vote passed 3-1, with Thorkelson voting against. Councillors Ken Cote and Nelson Kinney were absent.

Find out in Thursday’s Daily News what was discussed regarding the controversial dog bylaw.

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