St. John’s city council Monday reinstated a mill-rate reduction for residents who aren’t hooked up to city water and sewer services — because the city’s own taxation act requires it.
© Telegram file photo
In December, city council approved the 2016 budget, which eliminated the half-mill reduction. But a release from the city Monday said “closer examination of the City of St. John’s Municipal Taxation Act” revealed a reduction — the act doesn’t specify how much — is required under Section 4.3.
After the meeting, Coun. Jonathan Galgay, chairman of the city’s finance committee, said the mistake was concerning.
“We rely on staff for that advice,” he said. “Council had some very, very stern discussions today with senior staff about that. We apologize for the miscommunication, but moving forward we’ll be more diligent in terms of reviewing our acts to ensure we have the best possible information.”
Coun. Wally Collins, whose Ward 5 includes Goulds, which would see many, if not most, of the residents affected, said reinstating the tax break was the right move, given the expense of septic system installation and maintenance.
Coun. Art Puddister expressed doubt about where the $450,000 the city expected to generate with the tax hike would come from.
Derek Coffey, the city’s manager of financial management, said there will be further reductions through the year, while a news release from the city said the money will come from a combination of expenditure reductions already realized from early retirements the city gave to several senior staff late last year and savings through continuous review and improvement of programs.
“We will look across the entire city budget,” said Coffey.
Mayor Dennis O’Keefe said expenditure reduction is an ongoing process at the city, with the goal of making small cuts today to prevent greater impacts in future years.
“So be assured, Coun. Puddister, that that re-evaluation will take place, and a reduction in expenditures will also be in place as we go through 2016 and into 2017,” said O’Keefe.
When Puddister started to respond, O’Keefe declared him out of order and noted Puddister had already used his allotted speaking time on the issue.