Mayor Kevin Murdoch addresses residents after a seminal five-hour emergency budget meeting at Oak Bay council. (Black Press Media File Photo)

Letter from the Mayor: Oak Bay proactive amid COVID-19 crisis

Budget hike keeps Oak Bay on track with infrastructure replacement

Last Thursday council reviewed the 2020-2024 financial plan in the shadow of the coronavirus, recognizing and sharing the concerns and uncertainty caused by this pandemic.

At that five-hour meeting, council sought to protect residents and businesses from short-term financial hardship while meeting our longer-term responsibility to taxpayers and the balanced budget required by law.

Ultimately, council adopted an approach that funds committed core operations as well as infrastructure vital to our future, but, recognizing that any increase can be significant to some residents and businesses, ensured both generalized and targeted supports are being made available to help.

READ ALSO: Emergency measures whittle Oak Bay budget down 1.2 per cent

I would encourage everyone to read the details in the financial report in the April 23 agenda (www.oakbay.ca/agendas).

Among other details, it helps outline where Oak Bay differs from other municipalities and why each requires a unique financial approach. Notable in Oak Bay is a 94 per cent residential tax base and that 50 per cent of taxes fund fire and police services, a large recreation infrastructure, lean operations, and financials that include little borrowing but a large infrastructure deficit.

What may not be so obvious in the report is that the focus on improving core services and operational efficiency continues in this budget, and since February the municipality has already laid off or deferred hiring of around 250 employees.

The report details the specific financial impact of options on a typical household. Thursday’s decision reduces the increase from 8.1 per cent to 6.9 per cent, which will result in a $17 monthly increase to the median home’s tax bill in 2020. For comparison, the lowest potential increase (3.9 per cent) would have resulted in a $10/month increase.

The $7/month/house difference between the chosen option and the lowest option will generate $2.5 million for infrastructure in the five-year plan. Critically, this allows for Oak Bay to transition from a reactive “break-fix” approach to planned asset replacement, to pave streets, to take advantage of lowering construction costs, and to borrow money at rock-bottom rates, all reducing costs by many millions, likely tens of millions, more. While council decided it was important to keep funding core operations, it also recognized that supports should made available to help those in need.

At the meeting, council approved the following creative changes to reduce the burdens on business and homeowners through means allowed by the province:

– Shifting tax due date from July 1 to Aug. 4.

– Reducing the first tax penalty by half, and moving the second penalty to October

– Waiving penalties on utility bills

– Shifting solid waste fee to late fall

– Speeding up incremental building deposits and securities returns

– Modifying parking enforcement to reduce ticketing

Working with the province, council will continue to look at more options for targeted relief. Options being explored include hardship-based tax deferral, deposits for tree replacement, reducing or eliminating business licence costs, targeted relief from tax penalties, and more.

More than anything, council recognized that there is no known “right” approach to budgeting in these unprecedented times. I hope this summary provides some clarity on the debate undertaken and the reasoning behind the final decision.

Kevin Murdoch is the Mayor of Oak Bay. He can be reached for comment at mayor@oakbay.ca.

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