Côte St. Luc council Monday night unanimously approved taking out a line of credit — an amount of credit extended to a borrower — with the Royal Bank of Canada.
They did this because the island-wide agglomeration council is refusing to budge on the March 1 deadline for when demerged cities have to pay the first of two installments of their respective bills for island-wide services like public transit, police and fire. Côte St. Luc’s first payment amounts to $14.5 million.
Many councils passed their budgets later than usual because of the November election of the new Plante administration and the unexpected overall average 5.3 percent increase in agglomeration bills — Côte St. Luc’s hike was 6.7 percent. Some cities passed their budgets in December, and had to revise them in January.
Councillor Steven Erdelyi, in charge of the finance portfolio, said Côte St. Luc usually sends their first installment tax bills to residents Feb. 1, which they would have to pay by the end of that month.
“Then we would pay the agglomeration by the beginning of March,” he explained. “This year, because Montreal gave us our [contribution amount] a month late, it caused us to be about three weeks late to send out our tax bills. After the elections of 2009 and 2013, Montreal pushed back their deadline by a month to accommodate the fact that they were late. This time, we assumed they would do the same thing.
“But for whatever reason, they chose not to do that, and that’s why we’re in a tight situation in regard to cash flow. That’s why we sought out a credit line. Obviously, we hope to not have to borrow the full $14.5 million for each installment. We’ll see how much cash we have in the bank, depending on how many residents pay their tax bills early. But by law, we have to give residents one month’s notice for their tax bills.”
Thus, Côte St. Luc will send out the first tax bill notice by Feb. 21, and residents will have a month from then to pay it.
During the council meeting, Mayor Mitchell Brownstein, who spoke to the agglomeration council and Mayor Plante about the situation, urged residents to pay their tax bills before the March 1 agglomeration deadline.
“Then we will be able to pay down our line of credit and not pay any interest,” the Mayor added.
Councillor Ruth Kovac asked Brownstein if he would go to the Association of Suburban Mayors “and see if they would charge back the City of Montreal for the interest charges we’re incurring on their behalf. If all 17 municipalities made that proposition, it might carry some weight.”