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City of Williams Lake eyes budget as revenues set to drop

Options to address forecasted financial shortfalls before they happen to be discussed at council
Williams Lake city council meeting will be discussing their 10-year financial plan and water rates on Tuesday, Jan. 30, 2024. (Monica Lamb-Yorski photo - Williams Lake Tribune)

City council and staff were up to their necks in water talks while discussing some major budget decisions leading up to this week’s council meeting.

At the Committee of the Whole meeting on Tuesday, Jan. 23, council discussed their options on how to move forward on the 2024 budget and their 10-year financial plan.

In the report prepared for the meeting by Vitali Kozubenko, the city’s chief financial officer, he said looking at the current budget, council’s plans will result in a drawing-down of reserves, and while most of the city’s funds have reserves, the water fund does not.

Kozubenko said his projections show city financial reserves being drawn down mainly due to water and transit spending.

This will mean council has to either reduce costs and defer projects, borrow funds, increase revenue through tax rate increases, or some combination of the three.

Staff proposed one way to help mitigate the worst financial depletion would be to defer non-essential water projects with total estimated costs of $6.4 million until after the water treatment plant is constructed.

Council was looking to risk manage delaying some projects and relied on Kozubenko’s advice to choose options to address the projected shortfalls for the city’s draft budget and 10-year financial plan. This includes construction of the Tower Crescent Reservoir, for which just the design plan estimates have come in at more than $50,000 above the expected cost.

Part of the recommendation also includes an increase to water rates of approximately $37 per year per residential customer, an increase of 13 per cent. This increase would hopefully provide funds for contingencies during water treatment plant construction and operation.

Vitali’s report detailed some of the considerations and causes of budget shortfalls, including higher than expected costs reported by some departments due to supply chain issues, potential wage increases as staff renegotiate their collective agreement, which ends on June 20, 2024, and the implications of tax rate reductions, after the tax rate was decreased last year to help compensate for property value increases.

This year, the annual assessment in Williams Lake went down on average one per cent, which would lead to a reduction in tax revenue for the city if the city’s mill rate is not adjusted to compensate for the decline in value.

The council and staff also discussed the potential impact if Williams Lake Atlantic Power cogeneration plant closes, with Coun. Scott Nelson bringing forward a suggestion this may be in the works. A closure of the facility could have impacts to city revenue, but also would reduce water usage significantly.

Atlantic Power has not yet returned Black Press Media requests for information on any possible changes in the facility. In the past, the economic feasibility of the facility has been challenging, with Atlantic Power citing the rates BC Hydro pays for the power the plant provides.

Nelson also mentioned the possible drop in tax revenue caused by the significant decline in assessed values of many homes in the Terra Ridge development due to land slippage in the area.

Council has to have a financial plan in place before an annual property tax bylaw is adopted in May and this financial plan must be open to public consultation before being adopted. Staff said they are looking at holding public consultation in mid-March.

READ MORE: Williams Lake city council debates solutions to health care vacancies

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Ruth Lloyd

About the Author: Ruth Lloyd

I moved back to my hometown of Williams Lake after living away and joined the amazing team at the Williams Lake Tribune in 2021.
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