The other day, I did my own version of "Occupy". I went downtown and occupied Kimberley City Hall, but instead of carrying a placard or a banner, I had a coffee cup in one hand, a muffin in the other - and a bunch of questions written on a piece of paper, jammed in my pocket.
For weeks I had been going through a myriad of Kimberley's financial statements. I needed a clearer picture regarding the state of our town's financial health - what is the history of it, where are we now, and where are we going - so I dove headlong into the massive pile of financial statements. After consuming gallons of coffee over many weeks, and driving my family crazy at the supper table with "finance speak", I eventually came to grim conclusion that I still knew very little about Kimberley's municipal finance picture. Given that the fog wasn't lifting for me, I knew what my next step needed to be... go to the experts, seek their wisdom and clarity!
When Kimberley's Chief Financial Officer, Holly Ronnquist, agreed to meet with me, I felt a huge sense of
relief. The only lingering question was, could she keep it simple enough for me to understand? After only a few minutes in her office - amid the stacks of financial documents - I was pleasantly surprised to feel that the fog bank was lifting, Holly was able to explain a very complex financial picture in laypersons terms. What a wonderful, wise, and very understanding person. I received her version of "Finance 101 for Council Wannabes". The conversation with Holly was excellent, I enjoyed every minute of it. Thanks so much Holly.
Here is a snapshot of what I learned:
Historically, Cominco represented 54% of our tax base. The final year for full tax payment from Cominco was in 2001 - the City received approx. 2.7 million. In 2001-2002 Cominco paid approx. $670,000 in taxes and now pays under $200,000 annually in taxes.
When Cominco closed, our surplus was at $4,092,629 Over the years, we have used it to help in our transition, and after using one million as our contribution for the Conference Centre, our surplus has dipped below our one million minimum, and is currently around $900,000. The surplus has helped us transition away from reliance on Cominco taxes. We currently have long-term dept (debentures) of $7.4 million costing us
1% below prime.
Our current reality is that it takes approx. $22.5 million annually to operate our City. Of that approximately 45% is covered with property taxes, the rest via various user fees (water,sewer,garbage) and transfer grants from other levels of Governments. In 2012 - after 11 years - we finally start to add back to the surplus fund. It's a small amount ($23,452), but at least it is a start. The ten year plan for the surplus fund is for it to creep above the one million mark in 2014 and over three million by 2017.
Last year (2010) we had 96 new taxable occurrences representing $16.6 million in new taxable assessment. Holly mentioned that a minimum of 30 - 40 new taxable occurrences need to happen each year (minimum of $10 million in new taxable assessment) .
For the future of Kimberley, discussion will be how do we grow the tax base. We need to keep paying our municipal bills, while growing the surplus - who knows when we will need the surplus - and for what! I think we need to be open to new clean,light industry initiatives that will help grow and diversify the tax base. Even if the Sun Mine doesn't supply direct jobs, if it adds significantly to our tax base, then that would help ease the burden for the rest of us. I also think 30-40 homes per year is not an unreasonable amount to expect, we should be able to accomplish that, and the growth will be a positive not just in the tax base , but in our social and cultural base as well. If all this comes together, I don't see any reason why our residential tax increases should not be kept to a minimum - covering the increases in fixed costs (heating, fuel etc) that the city is constantly facing. Lately, that tax increase was at about 3% annually.
My "Occupy Spokane Street" was a success in terms of getting some answers to my questions. Thanks for your help Holly, I truly appreciate it! :)
Darryl Oakley
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