CityWest dropped a financial bombshell of sorts on the lap of Prince Rupert city council during its April 22 meeting — the company wouldn’t be paying the $500,000 dividend the City expected to see this year.
“Financially it was a tough year as we spent a lot on securing our Internet service backbone… Cash wise we are low. At this stage I don’t think we’re going to be able to give the City a dividend this year,” said CityWest chief financial officer Chris Marett, who said there was no firm date when the company would be able to give the City money again.
“It is hard to predict, particularly with the telecommunication industry, but it certainly looks like it will be in the next few years.”
The news not only pushed the budget shortfall the City faces this year from $675,000 to $1.175 million, but caught councillors in the chamber completely off guard.
“I am furious. I can barely speak about CityWest. To be introducing this information at this time when we had a large problem on our laps, it’s now almost doubled… If I didn’t have my nice clothes on and we weren’t in council I would have some much stronger words for CityWest,” said Councillor Joy Thorkelson.
“My head is spinning, as I am sure everyone’s is… I am looking at it, but I am not sure where to go with it. I am stunned is what I am,” said Councillor Gina Garon.
“I think most of council was surprised to hear we won’t be getting that $500,000,” added acting Mayor Anna Ashley.
With such a shortfall sitting over $1 million and a budget due on May 14, council requested staff draw up a bylaw that includes a two per cent tax increase to raise an extra $225,000, a $175,000 reduction in the paving budget, $251,000 in departmental savings and draws the remainder — which works out to approximately $524,000 — from the accumulated operating surplus. Chief financial officer Dan Rodin told council that the savings and the surplus draw down were one-time solutions, and warned of more challenging years ahead.
“Although there have been good projects announced and others underway, they will be hitting the tax roll in increments in 2014 and 2015 and most won’t be seen until 2016 or 2017,” he said, noting work done on projects like the Pinnacle pellet terminal up to July 1 of this year will appear on next year’s tax roll.
“The future for Prince Rupert, I believe, is rosy. But it is going to take some time… Our property tax situation isn’t going to significantly change for the better for some time to come.”
Council will meet to vote on the initial budget document on April 29.