City of Powell River Council has approved a Powell River Community Forest expenditure of $560,387.88 for the spring grants allocation.
At the July 3 city council meeting, chief financial officer Mallory Denniston provided councillors background on community forest grants. She said Powell River established the community forest corporation almost 20 years ago and that it is fully owned by city taxpayers.
“When the corporation started to earn a profit, city council created the Powell River Community Forest reserve fund,” said Denniston. “Annually, the profits and interest earned in this reserve is transferred to the community forest reserve fund, held directly within the city.
“The council of the day decided that the community forest reserve fund bylaw would restrict funds to capital projects that benefit the community. Historically, funds from this reserve have been granted externally to nonprofit organizations, as well as internally to city assets that benefit the community.”
Denniston said examples of city-owned assets that benefit the community are Powell River Recreation Complex, the track, the sea walk, the bike park, and various trails and parks. She said these are called community assets. The city’s sewer and water services, for example, would not be eligible for community forest funding under the current bylaw, she added.
“It is completely and fully within council’s authority to change this bylaw to allow the community forest reserve fund to be used for any other purpose,” said Denniston. “Over the 20-year history, approximately $19 million has been spent and is committed to city assets, such as the recreation centre, the track and the sea walk. Approximately $12 million of this fund has been granted externally to nonprofit organizations, mainly for capital projects that benefit the community.”
Denniston said in order to maintain the recreation complex, which has passed its useful life, the 2020 rehabilitation plan estimated $24 million in upcoming capital costs. She said construction costs have increased between four and five times since the rehabilitation study was completed.
“It is anticipated that the estimated costs will be much higher than $24 million,” said Denniston. “However, for the purposes of today’s discussion, the total capital cost estimate for city community assets will be $43 million in the coming five years, even though we know it will be significantly higher.
“How will the city fund this $43 million in community asset capital costs? Council may direct other reserve balances to be used, but even with this additional funding, there will still be a funding shortfall that will need to be funded through property tax increases.”
Denniston said if the community forest funds had not provided money externally to nonprofit organizations, the internal funding shortfall would be $12 million less.
“This is not to challenge in any way the community benefit from grants being donated externally,” said Denniston.
She said, however, that when community forest funds are granted externally, property taxes need to increase to make up for the loss of funding that would otherwise have funded the city’s internal community assets.
“To summarize, when the city donates Powell River Community Forest reserve funds externally, rather than using it to fund city-owned community assets that have a funding shortfall, the city must find another source of revenue to fund these capital costs,” said Denniston. “This other source of revenue is tax increases.”
Denniston said for the 2025 community forest fund process, council determined that the community forest funds be allocated internally and externally. In the 2025 budget process, council provided direction that the total grants to nonprofits be limited to 10 per cent of a three-year rolling average of the community forest yearly dividends. This direction resulted in a 2025 grant amount of $425,314, said Denniston.
The dividend estimate for 2024 initially was $600,000, said Denniston. The financial plan bylaw was adopted in March 2025 with the $425,314 allocation. She said on April 29, city staff members were notified that the 2024 dividend was updated to $3.7 million.
“The question is, should the city change the grant amount approved in the 2025 financial plan?” asked Denniston. “The answer is no because it was not provided until a month after the financial plan was adopted. Council may, however, amend the 2025 financial plan at any point.”
Denniston said the 2025 financial plan includes a grant funded by the community forest reserve of up to $425,314. She said the 2025 property tax levy was increased 1.7 per cent to fund this grant.
“If this amount is granted, there is no further impact to property taxpayers,” said Denniston. “A grant amount of $748,494.09, as proposed by the committee of the whole, would increase the 2026 property tax by a further 1.2 per cent, with a cost to an average single-family dwelling of approximately $35 more in taxes.”
“In conclusion, these are extremely challenging financial times,” said Denniston. “The city’s community assets have passed their useful lives. The recent inflation in the construction industry has only broadened the infrastructure funding gap.”
After extensive discussion by councillors, councillor Cindy Elliott made a motion to approve grants from the community forest reserve fund for a total of $425,387.88. Rob Southcott made an amendment to increase the amount to $560,387.88 to fully fund the qathet Academy of Music roof.
In Elliott’s motion, the academy of music roof funding was $145,000, but Southcott wanted to bump it up to $290,000 so that the roof could be quickly replaced. The amendment carried.
On the main Powell River Community Forest motion, as amended to $560,387.88, it passed, with councillors Jim Palm and George Doubt opposed.
Join the Peak's email list for the top headlines right in your inbox Monday to Friday:prpeak.com/account/mailinglist.
