By Chris Lewis | Jan. 21, 2021
The Town of Harbour Grace passed its budget last week, but not everyone on council was in agreement with the plan.
The budget and tax structure was presented by councillor Lynda Byrne, the chairperson of the Town’s finance committee. She said the mil rate will remain at 7.75, and the basic domestic water rate at $400.
She admitted this one was a tight budget with an approximate increase of $20,000 in spending from the previous year. The total budget weighed in at $3,594,358.
“We were able to balance the budget without raising any taxes, or any layoffs,” she said. “As we leave our most trying year, we look forward to the end of the COVID-19 pandemic. We will still see restrictions for 2021, but hopefully things will turn around to what we see as normal sooner than later.”
But when Byrne presented a motion to pass the budget, some of her fellow councillors raised concerns. Mayor Don Coombs and others noted they had only received their copies of the budget the day before.
“The reason I ran the last time in Harbour Grace is that I was quite concerned with the financials,” said Mayor Coombs said, noting that he was involved in a meeting a few days prior where he and other members of council were presented with some disheartening figures relating to the Town’s financial situation. “It got me scared, and got me thinking.”
Coombs suggested council needed some more time to prepare the budget and the Town needs a more concrete vision for its future.
“Unless we have a vision for the next five or 10 years – even though I won’t be here – I feel that we have to do something to curtail our debt and look after it,” Coombs said. “I have concerns that if we keep going down the slippery slope we’re going down now, that it’s only a matter of time before the government starts saying no to us for our capital projects. We have areas in our Town that don’t have any water or sewer, and need pavement, and it’s important that we look after that in the long term. For that reason, I do not support the budget.”
Coombs highlighted the budget outlined a $13,000 increase in business tax revenue, but noted Harbour Grace has lost plenty of businesses recently and did not understand where that figure could come from.
The extra $13,000 was, according to councillor Kathy Tetford, the result of assessed values that were supplied to the Town from the provincial assessment agency.
Still, with the closure of the Canadian Tire Gas Bar and several Air BnBs in Harbour Grace, Coombs said this $13,000 was null.
Tetford countered that the assessed values on the remaining businesses must have gone up.
Coombs repeated his earlier suggestion to defer the budget and hire a consultant, but Tetford said this budget was not all that different than last year’s. The only way to change it was to either raise taxes, or cut expenses, she said.
“I don’t think we need a consultant,” said Tetford. “I think there’s enough brains here to do a budget.”
Coombs said he had questions for Byrne and was not looking for a debate. He said each councillor would get a chance to air their own concerns or questions.
“Okay, go ahead,” Tetford said.
“I will,” Coombs responded.
Coombs said one concern was the $12,000 that was budgeted last year for equipment, maintenance, and fuel. Coombs noted about $5,200 was spent, but this year the figure is projected to be about $2,000.
Byrne said the money was divided out between there and another portion of the budget, but was uncertain exactly where.
As well, there seemed to be another $5,000 budgeted for Come Home Year, despite Come Home Year taking place the year previous.
Byrne said the hope with that money was that the celebrations will be able to happen in 2021 if the pandemic has subsided enough.
Coombs, however, said that $3,000 of that money would be better spent on a consultant.
Coombs also questioned the $10,000 allocated for public works equipment. Byrne said this low number reflected the committee’s decision to potentially lease out equipment instead of buying it outright.
After raising another question, this time about an “incurred deficit,” Coombs turned it over to the rest of council.
Councillor Kevin Williams stated again that he had only received his copy of the budget the day before, and that the Town had been given a deadline extension to the end of January. He said, if needed, they could probably get another extension to the end of February.
Tetford, using her turn to address the mayor’s question about an incurred deficit, outlined the difference between deficit and debt, and said the Town is still owed some $546,000 in taxes.
“If you take off the $165,000 (owed) that’s older than 2019 – because it’s probably going to be pretty difficult to collect that – we’ve got $381,000 outstanding for 2019-2020,” said said. “That’s one thing that helps me make a decision about whether or not we should raise taxes. We’ve got people who pay their taxes every year, and we’ve got those who have trouble. It’s a really tight line, but there’s $381,000 here that this Town has to collect. They’re only two years old. Take that, plus the $84,000 that’s with the federal government right now in HST rebates to come to us. We also have to apply for HST from July to December, which usually is more than the first half, so I’ll call it another $84,000. So, we come up with assets or receivables in the amount of $549,000 that we’ve got left on the table in 2020.”
Tetford continued,. “So, the Town owes $143,000 on accounts payable. The Town has a line of credit for about $157,000. So that’s a little over $400,000 that this Town owes under accounts payable, and their line of credit. But, accounts receivable are up $549,000. So, we’re in the black again this year $146,000.”
Tetford cautioned that these are not exact figures.
“We are owed $546,000, and I don’t think we’re going to collect the $165,000. That would be my opinion. But, $381,000? We’ve really got to push to collect that, and that’s where we are in our everyday operations,” she said.
Tetford said that in a past meeting with auditor Byron Smith, she specifically asked if the Town should start to worry. She said she was told no, but the Town needed to tow the line and be careful with its spending.
“The biggest expenditure we have now is our longterm debt,” Tetford added. “We’re paying $288,000 a year on our long-term debt charges, and $167,000 on our water and sewer. It’s not an easy budget and there’s not much you can do with it unless you raise taxes or lay people off. I think the chairperson and town manager did do a really good job of putting this (budget) together in my mind, and I’m pleased with it.”
Coombs said he hopes that the Town is able to collect the outstanding taxes, but admitted to having doubts.
Deputy Mayor Sonia Williams said she too had concerns about the budget, but was more troubled that a copy of outstanding accounts was accidentally attached to an e-mail to councillors the day before that contained the budget.
“We as councillors are not supposed to see what any taxpayer in this town owes,” she said. “I personally was taken aback by it. I know it was a mistake, but I think we should let those taxpayers know – the ones that were listed on the list that all councillors got – and I think we should let them know that we did see what they owed in taxes, and send out an apology to those taxpayers. Or something. I don’t know. It hit me like a ton of bricks when I saw it, and it just wasn’t right. It should not have happened, but it did, and I personally think that instead of keeping that to ourselves, it had to come out tonight.”
Put to a vote, Mayor Coombs, Deputy Mayor Sonia Williams, and councillor Kevin Williams voted against passing the budget, while councillors Byrne, Paul Fitzgerald, Shawn Vaters, and Tetford voted in favour of passing it – the same vote outcome as the year before.
Ultimately, the budget was passed, followed by a “Jesus Christ” exhaled by councillor Williams.
“For the public record, I do not support the budget,” said Coombs. “I really think that the Town of Harbour Grace should bring in a consultant to meet with these councillors and go through this budget and get it streamlined. I think we’re going down a slippery slope and have been. The numbers don’t lie, and the figures don’t lie.”