St. John's council backtracks on another budget decision

Councillors at city hall in St. John's have agreed to reverse another budget decision.

• St. John's council reverses cuts to arts grants
• City of St. John's backtracks on plan to charge for sewer repairs

First it overturned cuttingarts grantfunding, then the plans to charge for sewer repairs andnow it's backtracking on the vacancy allowancefor commercial property owners.

The vacancy allowance gave the owners of empty commercial buildings the chance to apply to be exempt from property taxes.

The move to scrap it didn't go over well with the business community.

"This decision had been met with significant resistance," Ward 2 Councillor Jonathan Galgay said.

"Over the past number of months we have had meetings with the business community as it related to vacancy allowance and we are reversing that decision, so the vacancy allowance will remain in place in 2018 moving forward."

At Monday night's weekly council meeting, Galgay made the recommendation to keep the vacancy allowance.

It was areversal fully supported by council and members of the business community.

"This means that there will remain more opportunities for businesses to invest," said St. John's Board of Trade chair Des Whalen.

"More money in businesses pockets. There will be an opportunity to invest, more growth, more development. We will not see acessation of development and that's a very good thing for both businesses and residents of St. John's."

Galgay did recommend council vote in some rules, "tightening" the vacancy allowance.

• Increased documentation from the property to support the validity of the claim
• Eligibility will only be approved when the space has been vacant for a full businessquarter
• Claims will no longer be retroactive; only the most recent and prior quarter can be claimed
• Property owners can only claim for one quarter if the tenant does not pay rent or is subject to bankruptcy proceedings
• Claims will no longer be permitted for rent-free periods

"Our job is to see business succeed and today I think I saw us move a little close to that," Whalen said.

Council had hoped getting rid of the vacancy allowance would see the city save an estimated five and a half million dollars.

Monday night Galgay said that money will now have to found elsewhere.

"[Identifying] program review inefficiencies within city hall as well as tightening up the vacancy [allowance]to reduce that number significantly, we hope. We should be able to find savings to offset the impact."

Galgay said this coming June council plans to release more ways it expects to cut costs at city hall.

"I have no doubt the next number of months are going to be difficult internally at city hall, but into the next year's budget I am fairly confident to say that we won't see a budget like wedid last year."