Commercial businesses in Martensville that have fallen behind in property tax and utility payments are getting a break.
Martensville City Council formally adopted two bylaws at a meeting on Tuesday, February 16 providing interest relief on overdue business accounts for both property taxes and water and sewer utilities. The city will forgive interest charges on overdue accounts retroactively to November 1, 2020. The policy will continue until July 31, 2021.
Commercial businesses that paid interest on overdue accounts beginning November 1, 2020 will be credited back the interest charges by the city. Businesses that have accumulated interest will have those interest charges reversed.
The policy represents an extension of measures that were first implemented a year ago by Martensville City Council, and are aimed specifically at helping struggling businesses cope with declining revenues and rising expenses brought on by the COVID-19 pandemic.
Last spring, Martensville suspended interest charges on overdue property tax and utility accounts for both commercial businesses and residential property owners. The interest rate relief measures were in effect from April, 2020 until October 30, 2020.
At the time the measures were first introduced, there was optimism the rate of COVID-19 infections would decline and the economy would be on the rebound by the end of 2020.
But that hasn’t happened.
In a report to the February 16 Martensville City Council meeting, Martensville Economic Development Officer Dillon Shewchuk said discussions with Prairie Sky Chamber of Commerce officials and individual business owners paint a stark picture.
Many businesses haven’t been able to make up for lost revenue suffered because of the pandemic.
Shewchuk said the challenges include restrictions on the number of customers allowed into stores, additional cleaning costs, consumer caution, and the general economic slowdown.
“Those in the service sectors have been particularly vulnerable as they rely on face to face service and patrons through the doors,” said Shewchuk. “In summary, many businesses are seeing less activity as a result of the pandemic but are doing their best to adapt and survive.”
He added that more businesses are for sale now than previously.
Shewchuk said providing interest relief will provide hard-pressed businesses with some breathing room.
The move is expected to have minor implications for the city’s 2021 budget. According to the report presented at the February 16 council meeting, there was over $4,400 in interest accumulated on all commercial properties in Martensville last month. Of this portion, approximately 60 per cent is the municipal portion. At that rate, the amount of interest revenue the city would forgive over a nine-month period is estimated to be approximately $24,000. There was $8,000 in interest on taxes budgeted for 2021.
On the utility side, according to the report, more than 20 commercial business accounts had varying degrees of interest charges over the past month. Based on that figure, the city’s water and sewer utility account would forgo approximately $1,000 to $1,200 in revenue by forgiving interest.