The Honourable Eddie Joyce
Minister of Municipal Affairs Government of Newfoundland and Labrador

Re: City of St. John’s Budget 2016

We, the undersigned concerned citizens of St. John’s request your urgent attention to the deteriorating situation within the Municipal Government of the City of St. John’s, with regards to the Budget of 2016. The current City Council has made budgetary decisions that ignore the economic realities of the global financial downturn and the city’s long-term economic health. Its continued good governance requires your immediate action.

For some time we as independent business people have watched in growing concern as the Council’s financial decisions became more and more disconnected from the economic realities of St. John’s. Although declining oil prices and the slowing economy have been noted and recognized by economists, businesspeople and citizens, for some time, the city’s financial plan has ignored the reality of a tightening tax base. Instead, the Council has embarked upon a spending spree that its taxpayers can ill afford, particularly during a growing recession.

The budget has swollen by tens of millions a year, by over $65 million in just four years, and residential and commercial taxes have risen at a pace far beyond the means and resources of local ratepayers. In mid-December the City released its 2016 Budget, which was immediately greeted with widespread horror and disdain. Although the document spoke of restraint and budget cuts, most city departments actually saw large increases. While City Councilors have spoken about cuts and restraint, no hard numbers or details of such have been provided as part of Budget 2016.

Since that release, the St. John’s Board of Trade, the Downtown St. John’s business association, Destination St. John’s, the George St. Association, the Restaurant Association of Newfoundland and Labrador, the Grand Concourse Authority, the Canadian Federation of Independent Businesses, the Building Owners Association, the Independent, The Overcast and The Telegram and hundreds of private citizens and business people have all come forward to express their concerns in the strongest possible way.

All have been ignored.

While some Council members have responded to letters and emails with offers of private meetings, there has been no public effort whatsoever to mitigate the worst effects of the budget, a budget that is disastrous for residents, small businesses, and our municipal green spaces alike.

Almost five weeks after the release of the budget, Mayor Dennis O’Keefe finally spoke to the media and defended the budget. However, his focus was the process of assessments and MIL rates, ignoring the concerns of the community, which were largely about the massive tax increases. The mayor has also chosen not to address the larger issue, which was that assessments were one variable in tax rates, and MIL rates were the other. It was up to the city council and the mayor to decide how these two were going to affect property owners. Their decision was to opt for a punitive tax hike.

When faced with an onslaught of complaints, the Mayors’ response has been to dismissively suggest that “people should have appealed their assessments”. This position ignores the simple fact that in isolation assessments have little to do with tax rates – that is the function of MIL rates, which are entirely within the power of the city council. It also ignores the fact that assessments were delivered to taxpayers in early December, with no accompanying information as to previous assessments or tax rates. MIL rates were not revealed until mid-December, at which time tax payers only had two weeks to connect the dots between their assessments and what they might have to pay in taxes, and file an appeal. This was a confusing process, which in its obscurity made it almost impossible for the average taxpayer to understand the personal implications of this budget.

For the Mayor and Council to pretend and suggest this process was fair and transparent, as the mayor subsequently did in several media interviews, was an abuse of power and demonstrates his lack of regard for the city he claims to lead. The Mayor even admitted this during a subsequent interview with the CBC, when he suggested that “we realize that the property tax is unfair, but we’re stuck with it”.

Council has also imposed full commercial taxation on vacant commercial properties, a move which property owners and developers find extremely punitive & egregious. In a recessionary environment this unfairly targets and punishes those who are already facing a loss of income, and is a powerful disincentive to investment in property development.

Judging by his reactions, and subsequent interviews, it is fair to say that Mayor O’Keefe & his Council have no intentions of even entertaining the repeal of the worst budget in the history of this 500 year old city. They refuse to address the fact that it was terrible treatment of the taxpayers to give them their tax notices when, due to the closure of the assessment window, it was already too late to appeal them. Nothing has been down to address this poor governance, which is quite frankly abusive of its citizens.

According to the City of St. John’s Act, one of the duties of the Mayor is to:

‘communicate information to the council, and recommend to the council the measures within the power of the council, that may improve the finances, health, security, comfort, sanitary condition and appearance of the city’

The Mayor’s recommendations have lead to an unsustainable tax burden, which is in direct contravention of the above duty. His Council’s budget may improve city finances, but it will be at the expense of security and comfort for hundreds of businesses and thousands of homeowners, who are facing unheard of and crushing tax increases. The Mayor and Council’s financial agenda and poor planning cannot be allowed to trump the well being of the citizens of this city. That is a blatant abuse of power on the part of the Mayor and Council, and we call on you as Minister of Municipal Affairs to address this wrong.

The City of St. John’s Mayor and Council’s abuse of and disregard for their own citizenry is both unseemly and undemocratic.

As such, we ask that you immediately intervene, reject the 2016 Budget, extend the deadline for property appraisals and call for a new budget.

Bob Hallett Jason Brake