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Mayor Naheed Nenshi is asking council to spend the first two years of an annual $52 million tax surplus on flood relief, suggesting that, despite pledges from premier Alison Redford and Prime Minister Stephen Harper, funding from higher levels of government may not fully pay for flood recovery costs in Calgary.
Photograph by: Calgary Herald/Files , Calgary Herald
Rather than tap city reserves that sit at record levels, Mayor Naheed Nenshi wants to use two years of the controversial $52-million tax hike in anticipation the province and Ottawa won?t fully cover Calgary?s flood recovery costs.
The plan, released Monday, is facing early resistance from his colleagues because it presupposes the Redford government?s pledges aren?t reliable and seems to defy the public consultation council did before the disaster.
In Nenshi?s quest for a council majority of eight votes on his proposal, his pitch appears unlikely to persuade those who want undo the tax hike, and believe the consultation reinforced how popular the ?give it back? option was.
Click here take a poll on how you would spend the money.
It?s not just council?s anti-tax stalwarts in this camp. Ald. John Mar, whose inner-city ward was hit hard by flood damage, said he?s torn.
?My first blush is that we had a process with Calgarians that indicates they wanted the money back,? Mar said Monday.
But he also needs to be convinced how completely the city?s flood repairs to roads, river banks and other city infrastructure will be funded by other governments.
?I know they?re saying, ?Don?t worry, but we?ll fix it,? but I don?t know to what extent that is to be the case,? he said.
Depending on how slow this week?s marathon council meeting proceeds, on Tuesday or Friday council will make its long-awaited decision on how to use the tax ?surplus? council approved in April.
The city has given early estimate of public damages at a quarter-billion dollars, but expects that to rise.
Premier Alison Redford and Prime Minister Stephen Harper have both pledged full support as communities rebuild. While the premier has said negotiations will be a ?complicated business,? she said cities shouldn?t have to assume they must raise taxes to pay repair bills.
Nenshi?s proposal, similar to one Ald. Gord Lowe has mused about, would devote the $52 million to flood projects for two years, creating a $104-million fund. He expects at least $50 million of the city?s post-flood needs ? including better mapping software ? won?t qualify for full coverage, and that anything left over could go toward mitigation.
?Look, we?re not creating flood devastation to spend the money on,? the mayor said Monday.
He added later: ?The province has not at all suggested what they?re going to cover (on mitigation) and their track record on this, as you all know, has not been very positive on spending money on prevention and mitigation.?
The city has $295 million in its fiscal stability reserve ? designed for emergencies ? about six times more than in 2007. While it?s supposed to stand at between five and 15 per cent of annual operating expenses, it?s now at 11 per cent. Nenshi said he?s wary of depleting it, only to have to use future tax windfalls to refill it.
Ald. Andre Chabot, who?s long favoured giving the $52 million back, said the reserve is healthy enough. ?There?s a significant amount in that rainy day fund we can use ... as a rolling bank account,? he said.
It would be dangerous for council to assume the province won?t cover the city?s flood costs before negotiations are done.
Ald. Dale Hodges, whose Bowness community and his own home were both ravaged, isn?t keen on the mayor?s plan, either.
?There?s a lot of unknowns in this business, and why we?d want to make a decision today I have no idea.?
Nenshi can count on Ald. Richard Pootmans as one supporter of his pitch. ?Calgarians want us to get on with the job of recovery,? Pootmans said. ?I?m sure they are very disinterested in intergovernmental negotiations and just want us to take action.?
Two public opinion polls before the flood showed more than one-third of Calgarians want the $52 million back on their taxes, more than for transit, debt relief, neighbourhood upgrades or cutting business taxes. The city?s own consultation drew more than half of its 10,500 responses on the tax break option, but the feedback process didn?t actually ask residents what choice they favoured.
?As such, we are not able to provide analysis related to the option preferred by most respondents,? an Ipsos report on the consultation states.
Nenshi said he?ll read all the comments the city gathered, but not until 2014 when council considers what to do after the first two years of his $52 million flood fund.
That assumes his idea wins this week. While that?s uncertain, a path to compromise may sit in Chabot?s observation that it?s hard to refund the $52 million in 2013, since property taxes already came due with the hike in place.
The Ward 10 conservative said he?s comfortable using this first year of the $52 million on extraordinary post-flood costs, but the city can put it toward tax relief next year.
? Copyright (c) The Calgary Herald
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