Prince Rupert City Council passes 2012 budget

The city council finally passes its budget for 2012 after many cuts and compromises

After months of meetings and number-crunching, the city of Prince Rupert’s budget is done.

Prince Rupert city council passed the budget document and its accompanying spending bylaw at their meeting on Monday.

If there’s one theme that pervades throughout the 2012 budget, it would be compromise.

The pressures surrounding this year’s budget have been immense. It is the first budget of the new city council, and so the first indication of the direction they will take the City financially for the coming years.

The City is facing a daunting, multi-million dollar infrastructure deficit that has to be addressed sooner rather than later – Not to mention a looming deadline for a decision on whether to repair or replace  the emergency buildings.

A multitude of fish plant workers could be losing their jobs, locally owned downtown businesses have closed and when they are being replaced its by big-box stores. Not only that, falling property values cost the City tens of thousands of dollars in tax revenue.

The city council’s attempt to make the the budgeting process more open by holding more meetings for public didn’t quite live up to expectations either. The meetings were at best poorly attended, but those who did come made it clear that there is a sense that many of the city’s homeowners feel that they are being overtaxed.

So council was faced with a shrinking tax base, giant bills they can no longer ignore, and no political will on the part of residents to see another annual tax increase.

The result is a no-frills budget where everything that can be cut without seriously compromising service delivery has been cut while making sure that there is plenty of money left it the capital purchases budget to make sure that the City can address the its many infrastructure problems.

There hasn’t been any big cuts to any one area but smaller savings picked up where they could be found, some vacant positions in the city staff will remain vacant for instance. That said, projects that have been deemed less than necessary, such as an upgrade to the city’s website or pool maintenance, have been side-lined entirely this year.

Community enhancement grants have also been given the axe. The council refused to give community groups any more money than they got last year, where they will remain frozen for the foreseeable future, and they cut others’ grants by half for a total savings of about $7,000. They are also warning groups that if they got grants this year, they might not get anything in 2013, and those who didn’t get a grant this year may as well not even bother applying for one next year.

The hot button issue is how much taxes are going to go up.

Those who did show up for the budget public input meetings made it clear that they did not want another tax increase, some even said that the city should change the fire department into a volunteer force. Neither of those things are happening.

When the first draft of the budget was released, the city was expecting a deficit of $450,000 which would have taken a 4.56 percent tax increase on residential property taxes to cover. After city staff pinched every penny the could find in the budget, they got it down to a 2.75 per cent tax increase.

To keep the tax increase even lower, the council went against staff’s recommendation and used $200,000 from the $1.4-million in the city’s accumulated operational surplus which is meant for unexpected expenses. If something happens and the City doesn’t have enough money in this fund to cover it, the expense will show up as a deficit on next year’s budget and will have depleted a fund that took years to build up.

Council said this was a risk worth taking in order to keep the tax increase down to 1.5 percent. This translates to an extra $14 for every $100,000 the property is assessed to be worth, making Prince Rupert’s total property tax rate for this year $928 per $100,000.

The budget and the spending bylaw have passed all three readings, and will be formally adopted at the next council meeting.

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