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Powell River Council rejects qRD resource-recovery funds request

City will not contribute growing communities grant money toward qathet Regional District project
NOT BENEFICIAL: City of Powell River councillors have rejected a request from qathet Regional District to contribute $851,720 to lower the cost of the resource-recovery centre and transfer station that is currently under construction at the former city incinerator site about Willingdon Beach.

City of Powell River Council has declined a request from qathet Regional District (qRD) to contribute additional funds for the resource-recovery centre (RRC) project.

At the August 25 special city council meeting, councillors discussed the request from qRD chair Clay Brander to contribute $851,720 of its $4.2 million growing communities fund grant from the province to reducing long-term debt, interest accrual and the taxation burden on current and future generations of taxpayers. Brander’s correspondence stated that if qRD contributed its entire $1.4 million growing communities fund grant, and the city contributed the $851,720 to the project, long-term borrowing could be reduced by $2.1 million, which would save just over $3 million in interest.

City chief financial officer Mallory Denniston said she was presenting an analysis and obtaining a direction for the request to allocate additional city funds to the qRD project.

“We will contribute to the project at the percentage allocated to us by the qRD and it is done based on the city’s assessed value as a per cent of the total of the qRD,” said Denniston. “That, for the current year, was 53.01 per cent. Currently, if we say no, we still contribute to the resource-recovery centre at 53.01 per cent of the cost.”

Denniston reviewed whether the requested contribution from the regional district is a good financial decision for the city.

“Simply put, to allocate additional funds to a shared project, we will never beat the financial gain from assigning the funds to our own purposes,” said Denniston. 

She outlined a scenario where the city put the $851,720 toward the RRC, which is money that the city would then not be putting toward the consolidated wastewater treatment plant, for example.

“We have to ask ourselves, if we do that, how much principal and interest will we pay over 30 years for these two projects?” asked Denniston. “If we contribute additional funds to the regional district, it’s about $27 million, and if we don’t, it’s about $26 million [for the wastewater treatment plant]. That variance is roughly $1 million that the city is better off.”

In doing her calculations, the interest rate of 4.71 per cent for a 30-year loan was applied, which was the municipal finance authority’s lending rate at the time of the report. She said that figure is now 4.98 per cent.

“In summary, the financial recommendation is the city is better off to craft a letter declining the request,” said Denniston.

Councillor George Doubt said residents of the city pay taxes to a number of different government bodies, such as School District 47, the qRD, and the city being three. Doubt said there were more of them.

“The regional district taxes on the assessments of properties and they have a regional service that is participated in by all the residents of the regional district, and that includes a regional waste recovery system, which is the resource-recovery centre that is being built,” said Doubt. “About 53 per cent of that joint project is paid for by taxpayers who are residents of the city. If we use that $4.2 million for a city project of some kind, such as a fire hall or wastewater treatment plant, all that comes out of what taxpayers in the city would have to pay for otherwise.”

Doubt said if the money is transferred and used for a regional district project, the taxation benefit and debt reduction payment benefit goes largely to the residents outside of the city. He said while it’s worthwhile for the regional district to ask, it’s not a good deal for city taxpayers.

“City taxpayers need access to that grant money,” said Doubt.

Councillor Cindy Elliott, who, like Doubt, is a city director on the qRD board, indicated at the regional board that she highly doubted the request would be approved by city council because the math doesn’t support it.

Council voted unanimously to not support the qRD request.

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