The proposed operating and capital budget featuring a 2.97 percent levy increase won’t be passed this year.
A brief committee meeting on Wednesday evening saw city CFO, Margaret Karpenko notify council of a letter she received from the Workplace Safety & Insurance Board (WSIB) stating how a technical glitch incorrectly quoted the city for an insurance rate of $1.97 (per $100 in claims).
The letter, which was dated December 10 from WSIB, stated the rate should have been at $4.14, resulting in an $875,000 expense for the city rather than a $300,000 credit that they had anticipated.
“We’re obviously surprised. I was shocked,” stated deputy mayor Tanya Vrebosch following the meeting.
Because Karpenko and city staff had compiled the budget with the $1.97 rate in mind, a motion was passed at the committee level to delay the approval of the 2021 budget until January 12. It was originally scheduled to be approved on December 21.
Vrebosch says the delay is the fiscally responsible thing to do in order to compile a fair 2021 budget.
“It’s disappointing, but it’s reality,” she said.
Karpenko set the estimated WSIB rate at $2.50 when putting the budget together, stating she was “wary” of the $1.97. Regardless, the glitch resulted in a $500,000 projected operating expense for city hall in 2021.
The same could not be said for the police department and library, both of which budgeted for the WSIB rate to be at $1.97.
Karpenko says the glitch would cost the library an extra $50,000, and the police department an extra $300,000. The library is expected to absorb their portion, making the total expense on the city’s overall operating budget around $825,000.
If council were to have gone ahead with the added expense on the books, the tax levy increase after growth assessment would have been 3.83 percent.
Karpenko added if council decided to try and absorb the $875,000 throughout the year in 2021, the 2022 budget would already start with a one-percent levy increase.
Despite WSIB’s false quote earlier in the year, the actual rate of $4.14 was retroactively charged to October 1, 2020, instead of the spring when the glitch happened. Karpenko says even with the retroactive charge, the city will still see a budget surplus at the end of 2020.
City staff will now have to factor in the new information and present the adjustments to council. Vrebosch is doubtful that the tax levy increase for the city will be able to stay below 3 percent.
“I honestly don’t know, but it depends on the choices that we make,” she said.“I don’t count anything out.”
It is not yet known whether other municipalities received similar letters from WSIB.
There will be a committee meeting for staff to present council with the modified 2021 operating budget on January 4 before the January 12 council meeting where it would finally be approved.
