Regional District budgets, property taxes and COVID-19 relief/support.
Updated: Jun 7, 2020
Several Canadian municipalities are readjusting their budgets in light of the economic impact of a COVID-19. The Town of Oliver eliminated a 9% tax hike and used reserves to adjust the year's first quarterly utility bill by half. The Town of Osoyoos voted to delay property tax payments until September 18. The City of Penticton has adopted property tax deferment and lower utility bills.
What kind of COVID-related support can rural residents expect to see when it comes to their property taxes? At this point, not much.
A few critical differences between regional districts and municipalities to note.
Regional District budgets must be adopted by March 31.
Municipal budgets must be adopted by May 15.
Unlike municipalities, regional districts are not tax authorities and do not collect taxes. The province is the authority and is the one that collects the property taxes for all regional districts.
Regional districts can not authorize the same supports (like payment deferrals) around property taxes that municipalities can.
The RDOS Board passed the 2020 Budget in February. Within a month, the health and economic impacts of COVID-19 was an growing concern.
By the end of March, I asked our CAO and CFO to request that the provincial government extend our Regional District budget deadline. I wanted an opportunity to take a second look at our pre-COVID budget in light of our post-COVID reality.
The answer from the Ministry was, "The Ministry is not extending budget deadlines... If there is a surplus at the end of the year, you could adjust 2021 requisitions to take that into account."
My request was for an extension (I suggested two weeks) to allow our Board the time to review a budget that was base on pre-COVID priorities, projects and staffing. The provincial government has rightly asked for incredible sacrifices from British Columbians. The request has put health above all else, and I agree with that approach. However the economic impacts can be felt by all British Columbians, not just those who live in municipalities.
Municipalities have, in this instance, a significant gift of timing with a later budget deadline. Many are reevaluating their budgets, adjusting project priorities, leveraging reserves and pushing back property tax deadline or providing alternative payment opportunities to citizens.
Regional Districts do not have the authority to do the same for their citizens. The province is the taxing authority for the region.
After receiving the answer from the Ministry, I emailed my fellow Directors for support to further pursue my request for a budget extension with the Minister directly (rather than her staff). Many Directors were in favour, some had alternate suggestions, and some thought the savings wouldn't justify the effort. Regardless, the RDOS Chair agreed to and did pose the request to Minister Robinson. That was in April (within a week of the March 31 budget deadline). Now that we are into May, it is evident that the province is not going to grant regional districts the opportunity for a second look at their 2020 budgets.
Local governments, including RDs, rely on property taxes to ensure essential services get to residents. No wants to see our garbage uncollected, our water untreated, or our planning department closed down. Never was I advocating that we jeopardize or risk any essential services or put staff on a 'chopping block'.
However if there are projects, staffing, or contracts that the RD is no longer providing in the coming year due to COVID, we should not tax our residents for those services. But without an extension, our Board can not have the conversation and pass along savings to our residents. To be clear, an extension was not granted by the province.
And I know, not everyone needs a break or a deferred payment plan or options. But some do, and those are the residents I who I am advocating for.
Today, rural BC residents can only leverage the existing property tax deferment plan which applies admin fees and interest. Our next Board meeting is this Thursday, May 7. I will ask for the Board's support to follow up with the Minister and, at the very least, eliminate the admin fees and interest for this year's tax deferment requests from rural residents.
*** UPDATE MAY 8 - every other week, the Minister of Municipal Affairs has a one-hour call with Mayors and Chairs from around the province. I asked our Chair to again raise the rural property tax issue with the Minister. She did. Hoping to hear a response from the Minister soon.
***UPDATE MAY 13 - here is the answer from a Senior Policy Analyst within Local Government Finance who answered on behalf of Minister Robinson.
"While the Province has made no decision on providing rural property owners with the ability to pay their 2020 property taxes in multiple payments with no interest or penalties, the Province does have supports in place to provide assistance to residential home owners. For example, certain residential property owners may be eligible for property tax deferment. Property tax deferment is a low interest loan program that helps qualified B.C. homeowners pay their annual property taxes on their principal residence. Homeowners that are 55 or older, a surviving spouse, a person with disabilities or a family with children may qualify for deferment."
In other words, the same supports that have always been available, pandemic or not. Admin fees and interest charges stay.
*** UPDATE JUNE 2 Update - at today's Board meeting, Director Vassilaki provided an apology for his comment at this week's CoP's council meeting. If you missed the story, here are the links to the articles in the Herald.
Mayor Vassilaki's reprimand towards RDOS staff is misplaced because the responsibility for setting the budget lies with the Board; not the staff.
If you have read to this point, you know that I have been advocating for rural residents to get the same breaks as municipal residents on property taxes. April 1 - I asked our staff to check in with the Province to see if regional districts would be granted a budget extension. The answer was 'no, roll any surplus into 2021'.
The same day, I emailed the RD Board (including Director Vassilaki) asking for support to contact the Minister directly. At the time of this discussion, the Provincial budget deadline was only the day before. Timing is everything. If the board was united and took action quickly, we could have reached the Minister in a timely matter and advocated on behalf of our citizens.
Alternatively, the RDOS Board could have called a special meeting to relook at our budget.
Both options, immediately contacting the Minister or holding a special meeting, required unanimous support from the Board. Neither of those options was supported unanimously.
If every Director agreed to bring the budget back, we would have found a way to make it happen. And that is what would have empowered our staff to adjust their budgets accordingly. But that did not happen. Some directors were in favour, some opposed and some remained silent.
The responsibility of a pre-COVID budget going to citizens in a post-COVID reality lies with Board. The staff's hands were tie.
Interestingly, we received our tax bill in the mail today. I break down my tax notice here.
Thank you for reading.
Director, Area "F"