Tax deferment
The tax deferment program discussed earlier this month by council has been fleshed out by CBRM staff and approved by council.
The CBRM has adopted the framework developed by the Federation of Nova Scotia Municipalities (FNSM) and the Association of Municipal Administrators of Nova Scotia (AMANS), tailored ever-so-slightly to meet its own needs.
To recap: the CBRM will borrow money from the Municipal Finance Corporation at 1.1% interest to cover property taxes for residents unable to pay for COVID-19-related reasons. Property owners will then be given 30 months to pay these taxes — the first six months at a nominal rate and the next 24 months at an amortized amount.
Both residential and commercial properties are eligible for tax deferment.
The details that have been hammered out since the program was first discussed include the interest rate to be paid by those deferring their taxes — 1.35%, which includes the municipality’s 1.1% borrowing cost and a 0.25% admin fee.
The payment for the first six months (which could have been set at $1) has been set at $25.
Here are the qualifying criteria for residential properties (click to enlarge):
To illustrate how the program will work, CBRM deputy CAO John MacKinnon used the example of a resident with a $2,000 tax bill due on June 30.
For the first six months (until December), the resident will pay the CBRM $25 per month.
For the following 24 months (beginning in January 2021) they will pay $78.73 per month.
By the time the resident has paid their taxes, they will have paid $39.43 in interest.
This, as MacKinnon pointed out, is on its face a good deal, provided the resident in question — who has qualified for this deferment by virtue of having lost all or most of their income due to the pandemic — is able to return to work by July and is able to afford $78.73 per month on top of their 2021 and 2022 taxes, which will come due during this 30-month period.
On the commercial side, the qualifying criteria are as follows (click to enlarge):
MacKinnon said very few residents would fall into that second basket, it’s apparently there to catch any outliers — like the owner of a nail salon assessed at over $5 million.
To explain how the commercial tax deferment would work, MacKinnon used the example of a commercial property worth $10,000.
The owner would pay $25 dollars for the first six months, then $419.06 for the next 24 months.
In the end, the owner would have paid a total of $207.33 in interest.
Again, the figure $207.33 sounds infinitely reasonable — assuming the business owner has been able to resume business by July and that their business is good, two big assumptions for bars and restaurants and nail salons and gyms in a world in which we’ll be living with the virus.
The CBRM calculated its expected commercial property tax shortfalls by taking each of the business categories provided by the FNSM and AMANS and estimating how hard each would be hit by the pandemic and how big a hole that would put in the CBRM’s tax revenues (click to enlarge):
(The one that surprised me was call centers, which I had thought were poised to allow as many employees as possible to work from home but which are apparently expected to lose 80% of their revenue due to COVID-19. Obviously, this is a story I will have to look into.)
As you can see, estimated losses on the commercial side totaled $20.6 million. MacKinnon said they are estimating 30% of residential property owners will delay paying their taxes, adding another $22 million to the shortfall, and so have requested to borrow $42.3 million from the province.
In the discussion that ensued, Councilor George MacDonald asked how the CBRM was doing with water and tax bills at the moment and CFO Jennifer Campbell said they’d seen no significant reduction in pre-authorized payments, but with the extended due date for payments they were still unsure what would happen with people who pay cash on the due date.
Campbell said they also had “no idea how long” businesses and residents would be impacted by the pandemic or how much longer the restrictions would be in place, both of which would affect bill payment.
Councilor Bruckschwaiger called the program “a good start” but noted that it is “putting off the inevitable,” in terms of people paying their taxes:
I just wish we were able to give some type of a break here, but unfortunately, [as] the lower level of government, we don’t have the ability to run a deficit. Very difficult for us, on the front lines, hearing it from residents and businesses.
District 1 Councilor Clarence Prince said that although it was “not perfect” the program did provide “temporary relief.”
Council approved the tax deferment program and a temporary borrowing resolution to allow it to borrow the $42 million from the MFC.
MacKinnon expected to begin accepting tax deferment applications in the middle of this week with a deadline for applying of June 30th.
Garbage
HEAVY GARBAGE HAS NOT YET BEEN RESCHEDULED.
I’m yelling that for the benefit for those of you tempted to haul that old sofa to the curb.
The reason this highlight of the CBRM social season has yet to be rescheduled is fear that “pickers” searching their neighbors’ trash for treasure could contract or transmit the coronavirus. Francis Campbell, in charge of solid waste management for the CBRM, said when and how to go ahead with the pick-up will be a decision for council to make in the near future.
A number of councilors, including Bruckschwaiger, Eldon MacDonald and Earlene MacMullin of District 2, noted that people have begun putting their garbage out already and wondered if the it might be possible to, as Brusckschwaiger put it, “tackle it and get it done so it’s out of our hair for the summer months.”
Campbell said that the companies collecting regular garbage in Sydney and New Waterford already have heavy garbage in their contracts and said tendering for other areas of the municipality could be done quickly, once a date was set but that changing this system in an effort to get the collection done more quickly could lead to issues with equipment. He concluded, though, that:
Anything can be done if we’re willing to pay the money.
Wayne MacDonald interjected at this point to say that he wouldn’t recommend changing the system, saying the CBRM has “taken a lot of time over the past few years to improve the service” which he rated as “excellent.” He reiterated what Campbell had said about the concern being Public Health restrictions which he estimated would be lifted in “about a month.”
Councilor Gillespie, who apparently hates heavy garbage as much as Councilor Eldon MacDonald hates urban chickens, said he thinks it’s a “waste of money” although “people use it,” and would not support “spending another dime on it.” He then said he understood that the “vast majority of people” understand that it’s not happening yet, although he allowed as how he hadn’t been out in eight weeks himself and the “only person” he gets to talk to is his cat.
The discussion ended, as discussions of heavy garbage are wont to in our community, with CAO Marie Walsh questioning whether the CBRM could afford it this year — it’s kind of a reverse Lucy-with-the-football moment in which Walsh tells us we cant’ afford it before finally relenting and allowing it to proceed. This year, mind you, there may be more to her threat than usual. She noted the CBRM will be looking at a deficit (which it is not permitted to run, under provincial rules) and the $250,000 budgeted for heavy garbage may be better spent elsewhere.
Walsh promised to bring the projected deficit figures to the next council meeting.
Other solid waste developments include the reopening of the dump, which I missed but which apparently happened on April 28 to the great joy of residents who formed a line at times 40-cars long at the Spar Road entrance to said facility.
This went over such a treat with the citizenry that the CBRM followed up by opening its seasonal leaf and yard waste sites.
The Community Clean-up will be rescheduled when it can be “undertaken safely,” although all necessary equipment has been purchased.
The CBRM will continue to allow citizens two “privacy” garbage bags — that is, black bags as opposed to the clear ones we’re supposed to be using — as part of each household’s five-bag limit.
Councilor Jim MacLeod pointed out what we all know, which is that this system allows residents to “privately” send recyclables and compostables to the landfill (although, as the Spectator‘s Ethicist reminded us last week, much of our recyclables end up there anyway, even when placed initially in the correctly colored — blue — bag). MacLeod hoped the municipality would not backslide on its commitment to clear bags.
And that’s all I’ve got on the garbage file.
But while you’re waiting for the heavy garbage, why not enjoy this ode to our annual ritual by Victor Tomiczek, with Donnie Calabrese on bass. (The oddly lovely photos are by Lindsay Uhma and the recording was engineered by Steven Fifield:
Downtown in bloom
COVID-19 will apparently not stop downtown beautification in the CBRM.
Councilor MacMullin asked that a program that places containers of flowers in the municipality’s various downtowns be reinstated based on a cost-share basis, leveraging, wherever possible, the province’s 2020 Beautification and Streetscaping Program which provides up to $25,000 per project.
MacMullin’s rationale for reinstating the program was that it would “put some immediate investment into small business within CBRM” as well as contributing to the employment for the individuals who would be “installing, maintaining, watering, etc.”
Janelle Osborne, President SDDA; Eldon MacDonald, Councillor District 5; Mayor Cecil Clarke, CBRM; Hon. Lisa Raitt, Minister of Transport; and James Sawler and staff, Mabou Gardens.
Councilor Eldon MacDonald agreed that the program should be reinstated, then announced that the man whose company (Mabou Gardens) has been handling the contract for Sydney has had a heart attack due to “stress issues” associated with it. MacDonald said the business has to order “those seeds” “to supply Sydney” in the fall, before knowing whether the program will be funded or not. He suggested to alleviate this stress, the contract for the program should be awarded for three years at a time.
I presume he means the CBRM should follow its procurement policy in this matter (over $2,000 but under $10,000, the purchasing department must get three quotes; over $10,000, it must put the contract out to tender).
I have all kinds of thoughts about the blossoming program, which was the brainchild of Business Cape Breton (BCB), the quasi-public, quasi-private development agency, that used to oversee it for the CBRM in return for a 10% management fee. (In 2017, for instance, the CBRM gave BCB a $115,000 sustainability grant it did not actually qualify for to oversee the program.)
In 2018, it was decided there was no room in the budget for blossoms, an oversight Councilor Eldon MacDonald tried to address in March of that year when he noticed there was $100,000 left in the snow clearance budget, which he suggested be put into the blossoming program to help the owner of Mabou Gardens who had been stuck with “200 commercial-sized hanging flower baskets for which he has no use.”
MacDonald’s proposal — which would have meant re-opening painful budget discussions during which council had turned down almost every community group and cultural organization that had sought funding that year — was met with solid opposition.
One of those most vociferously opposed to the flowers was MacMullin, but in 2019, she had a change of heart, as I reported:
[MacMullin] also confessed to having been wrong about the value of flowers..
By that time, though, there was a new version of the program that saw individual businesses and organizations sponsoring the flowers. This year’s program is described as “co-sponsoring.” Honestly, I can’t keep track of who is paying for what, but councilors all love the flowers and MacMullin’s resolution passed unanimously.
Me, I still like the idea of pollinator gardens like those I wrote about in 2018.
