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Municipal Budget Time Posing Special Challenges for Interior Communities

By 250 News

Wednesday, January 07, 2009 04:00 AM

Prince George, B.C. - It won’t be long before the City of Prince George and communities throughout the province, start budget deliberations.  
 
This may be one of the most difficult budget years for many communities as the downturn in the economy leaves them with trying to balance spending and taxes with the reduced pay cheques for many residents because of cuts by their employers who are trying to balance their own books.
 
In Prince George, Lakeland Mills has already sent a letter to the City of Prince George requesting the City sharpen its pencils and make some cuts. According to the letter from Lakeland’s President, Keith Anderson, his company paid nearly half a million dollars in property taxes last year. The company, says Anderson, has taken measures to reduce costs in all areas under its control and that it is continuing operations only because they are losing less money by staying open than they would if they shut it down altogether.
 
That mill employs 165 people.
 
Manager of Financial Services, Kathleen Soltis, says Anderson will be invited to state his case to Council during the budget meetings that get underway in February “At the beginning of each meeting there’s 15 minutes where the public can come and make comments so in our letter of response to Lakeland we would invite them to make a presentation at the beginning of one of those meetings.”
 
Anderson is calling for significant cuts on the part of City hall, his letter requests an overall reduction of about 20%. Soltis says cuts of that depth are possible, “Possible yes, but likely not practical.”
 
Mackenzie has suffered greatly over the past year with the loss of jobs in the forestry sector, but it has something going for it that Prince George does not, Mackenzie has no debt. “We have always had a reserve and right now there is about $1.4 million in that reserve” says Mayor Stephanie Killam.   “We have been very fortunate in landing grants and being able to leverage those grants for more  dollars.”
 
While the mills may be idle, they have not applied for any changes to their status, so their tax base remains the same.
 
There is still an outstanding tax bill from the former Pope and Talbot mill which is now owned by Worthington Properties. That bill is for $2 million dollars and Mackenzie’s lawyers are watching the situation closely.
Administrative staff in Mackenzie took a 5% pay rollback a couple of years ago. “That was really important” says Killam, “it shows they believe in this community .” The unionized employees head into negotiations for a new contract soon.  
 
Still, Killam says budget time won’t be easy, “We will be looking at our operations and for efficiencies that can be made.” 
 
Quesnel is also facing an interesting budget year. The people in that community voted in favour of a new 2,000 seat arena that will require the community to raise about $15 million dollars. The owners of the mills in Quesnel had sent out a strong signal last fall, urging voters to veto the arena because of the tax implications during the difficult economic times facing the companies. 
 
The owners had taken out an ad just before the municipal election and the referendum on the rec centre. The ad warned increases to property taxes because of the new facility could have repercussions "Every dollar of additional expense our companies face in taxes further jeopardizes the jobs we have been able to retain during these difficult times."

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Comments

Does highway snow clearing fall under the municipal budget?
The clearing on Highway 16 between PG and Bednesti is pathetic. I realize it has been snowing continuously for some time now, but the clearing past the district line is much better on the Vanderhoof side near the bottom of the Cluculz hill.
This is not a new issue. The clearing is continuously better on the Vanderhoof side, while the highway is regularly much worse on the PG side.
Is there anything that can be done? Is there anywhere we can call to complain? Who is responsible for clearing the highways?

Whoever it is, they are not doing a very good job.
Our side road has not been plowed since it started snowing 3 days ago!! If this continues I will not be able to get my small car out of my driveway to get to work. This is rediculous!!! Who ever is in charge of this department should be trained properly or fired!! End of story.
"Every dollar of additional expense our companies face in taxes further jeopardizes the jobs we have been able to retain during these difficult times."

Its time that our great job providers started putting their money in the bank instead of doling it out to the sharholders when profits are up. Welcome to the real world.

Cheers
Uh, Bridge, if the 'great job providers' don't dole out money to the shareholders, there won't be any shareholders and the 'great job providers' will cease to exist.

Real world indeed.
dan

No highway clearing is a provincial issue. PG and Vanderhoof are both YRB contracts. I think that YRB generally does a pretty good job. They are the ones to contact if you have any specific complaints.
Profits are up pay dividends. Profits are down get cash from government. The CAW and the 'big' 3 have cast the die, now big business and big labor can finally come together to screw taxpaying Canadians out of our tax money together. Its great to see them agree on something.
dan - Highway snow clearing has nothing to do with the municipal budget. Take up your concern with YRB - they are the PRIVATE company contracted to clear highways in our area. If you are serious about taking on this issue then you should also contact the Ministry of Highways and lodge a formal complaint - and request a follow up on your complaint. The government, in this case the Highways Ministry, is responsible for monitoring the effectiveness of the private contractor, YRB, and if they receive enough valid complaints then they are penalized and reprimanded for poor performance and this counts a against them when the next contract comes available.

On the real subject of this news story - I was surprised when Quesnel residents voted in favor of the new arena as the majority of Quesnel residents incomes are tied to the foresty industry. With all the shut downs and closures they have seen over the past couple of years they basically voted to increase their taxes....doesn't make a lot of sense.

Profit is not a four letter word and when you have large dollar operations like lumber and pulp mills warning the general public that the future may not be as rosy as the past - people should pay attention.

Even though I am personally optimistic about the coming year - my industry is defininely forecasting a slower year and this common thread in the business sector should be sending a message to governing bodies to be careful with the budget this year.
Thanks Born in BC. I agree that YRB does generally do a pretty good job. But there certainly is a difference between YRB Vanderhoof and YRB Prince George for whatever reason.
The PG side is reliably worse.
"When forest products company WFP shuttered the mills and logging operations before Christmas, the facilities were to reopen in January. The indefinite closing lays off 720 sawmill workers and loggers from the Duncan, B.C.-based company."
Forest-web

Apparently WFP has closed indefinitly its Nanaimo operations. One of the biggest single closings ever. The difficult reality is that closures like this is what is needed to reduce supply and bring about a healthy forest industry. Hopefully Canfor and the local independents will be some of the last ones standing. Its difficult for us because we must essentially 'cheer' the closure of other mills and the difficulties that come along with it for other individuals, families and communities. I guess if I have to choose between another community and PG, I will choose PG.
MrPG ... everyone is asked to see where they can cut expenditures. Shareholders are no exception.

Shareholders who still have money and have not bailed yet need to decide which companies they will keep their money in at this time that they feel have the potential to start making money again within a year or two, and which ones are basically in their dying year(s) and will be chewed up by those that have the ability to provide products and services.

There are no guarantees for anyone when push comes to shove, shareholders included. People like Pattison have enough money to live on even though they might be taking a beating. The ones that are smart and perhaps a bit lucky as well, will come out of this in 5 years time and be better off than they ever would have been had there not been such an economic downturn.
I think you are bang on with everything you touched on in your post "born in BC".