The City of Castlegar is in a tight position, perhaps that’s why they penned a pretty slick media release a week ago week encouraging residents to participate in a survey and inviting them to the two public input sessions being held on the budget and financial plan. The public has been eerily quite on the issue of taxes since the Celgar dispute over taxes erupted last year, while the Mayor and Council have been working on multiple fronts to solve the industrial tax dilemma. Things have finally come to a juncture, with Celgar presenting their position at an open council meeting tonight, and the City issuing this most recent media release:
Council will also announce a ‘Made-in-Castlegar’ Memorandum of Understanding between the City and its primary employer. The MOU outlines the following agreements:
– Celgar will withdraw its court challenge to the city’s tax bylaws.
– Celgar will pay all outstanding 2009 taxes, penalties and interest on the outstanding amount.
– The City will reduce Major Industry taxes by $350,000 in 2010; $55,000 in 2011 and $50,000 in 2012 and analyze potential for further reductions of $190,000 for 2013 to 2015.
– The City will bring forward a Tax Revitalization Bylaw to increase outlay in Castlegar by exempting new industrial investment for a limited period.
The MOU between the municipality and major industry is the first of its kind in British Columbia and highlights the city’s intentions in maintaining a positive relationship with its primary employer. In addition, council hopes the reduction in Major Industry taxes will encourage Interfor to consider reopening their mill and providing additional local employment.
Council and Celgar seem to have resolved some of their differences, at least for the moment. How this plays out in the public during the public meetings on the budget, we’ll find out next week. The proposed budget outlines spending cuts of over 4.5% with a tax increase to residential properties of about 7%. Considering that without Celgar’s taxes, the City would be searching for funding for over a third of their budget, these administrative cuts and tax increases are a fairly predictable and balanced response to the issue.
Some questions that remain unanswered:
- What was the value of special projects in 2009 – (such as the Sustainability Planning process, the City rebranding and any capital works)?
- What special projects are being considered for 2010?
- Does the perreduction in administrative costs include
No one wants to see services cut, or funding reduced to community facilities, but the fundamental question must be raised – is it sustainable? Can the community, including Celgar (or not), continue to expect the high level of service that has been a way of life for the past 20 years? Is the funding model sustainable? Are the costs sustainable? What are the external drivers that will influence the future prosperity of this region, and what are we doing to embrace (or protect ourselves from) them?
The sigh of relief that Council is feeling right now over the Celgar agreement does not reach the systemic problems with the industrial tax situation across the province – that battle is still being fought. The efforts thus far are necessary to remedy the historical situation, but do not tackle the changes that are likely in our future – changing demographics, climate change, peak oil and higher gas prices, and a changed economy.
Winners and Losers
I can’t see that there will be too many “winners” out of any changes to the budget in 2010 – but it is certainly too much to say that raising residential taxes makes us all “losers”. In the big scheme of things, the additional $118 a year in taxes on the average house may be exactly the small push that residents need to take a greater interest in how their community is run and the challenges we all face.