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Powell River resident shares concerns about sewer rates

Increase in user taxes outlined in correspondence to finance committee
City of Powell River councillor Jim Palm
TAXING MATTERS: In addressing correspondence regarding increases to sewer rates in Powell River over the next four years, councillor Jim Palm said the city is between a rock and a hard place in terms of taxation, and that he has been speaking out against tax increases. Paul Galinski photo

City of Powell River councillors were served notice that sewer user tax increases could lead to significant tax increases in the coming year.

At the October 22, finance committee meeting, Diana Collicutt, representing Townsite Ratepayers Society, stated that the sewer user tax increases proposed of 7.5 per cent in the next two years and five per cent in the third and fourth year are excessive.

“How many more increases in these amounts do you expect property owners to be able to afford?” asked Collicutt in an email.

“In May, council’s spin to accept the 4.7 per cent increase [in taxes on the average household] was a zero per cent increase in sewer user fees. Three months later you are implementing 7.5 per cent for 2021. Property tax increases in Powell River are increasingly out of what is acceptable for people to afford because it appears we are heading for double digit increases in 2021.”

Collicutt stated that maybe it is time for council to recognize it needs to take more proactive measures, cut spending and realistically start living within its means because taxpayers cannot shoulder these excessive increases.

Mayor Dave Formosa thanked Collicutt, who was in council chambers, for the email.

“I tend to agree with the comments,” said Formosa.

He said he voted for the increase but asked a lot of questions about these increases, “which just don’t stop.”

He said the city has to live within its means.

“I can just say I agree with the comments in this letter,” added Formosa.

Councillor Rob Southcott said he wanted to remind council that the central part of this increase is to shift revenue into reserves. He said it was in consideration for coming generations, and that, principally, is why he supported the initiative.

Southcott asked chief financial officer (CFO) Adam Langenmaier if the taxes and fees were put together, what proportion does this represent of the overall amount that taxpayers pay.

“7.5 per cent seems like a large number but put into the context of what we pay as a whole, this is just one small part of it, is it not?” asked Southcott.

Langenmaier said if one looks at percentages, without looking at the dollar value, the 7.5 per cent increase sounds like it’s more than the 4.7 per cent overall tax burden. He said in terms of the actual dollar figure increase in sewer tax increases, he didn’t have that figure in front of him.

Southcott asked if it would be safe to say the proportion per household would be relatively small compared to the overall picture of taxes and fees a householder would pay. Langenmaier said that was the case.

Councillor Cindy Elliott said she wanted to explain why she supported the increase. She said when it comes to the sewer and water fees, it can only be spent on sewer and water. She added that the asset management plan calls for replacement of a lot of the city’s aging sewer infrastructure.

“We, the city, are on the hook, for making sure we can actually pay for the upkeep, replacement and upgrading of all of these sewer systems that are aging,” said Elliott. “What the CFO explained to us, if we held the line and had no increases, we were going to run out of money and be in the hole for that purpose. If we did smaller increases, we would fall short of the reserve.

“These are all burdens I didn’t want to pass on to future generations, so I supported the fee increases on the sewer system because it’s necessary for responsible asset management.”

Councillor Jim Palm said he welcomed the letter from Collicutt because he has been speaking out against tax increases.

“They all compound,” said Palm. “What concerns me most is the reference to double digit tax increases coming in 2021; I concur with that, because in this past year, my taxes went up 12 per cent. We are just seeing the start of this and it’s not going to go away any time soon.”

Palm said with the mill in the situation it’s in, and qathet Regional District costing taxpayers more and more, because it is on the same track as the city in increasing its taxes, down the road it’s not a “pretty picture.”

“I couldn’t agree more with the letter and we’re between a rock and a hard place in this community regarding taxes,” said Palm. "It’s time we take a look at everything. I know our finance advisory committee is hard at work  and will be going through every budget, so they are going to turn over every rock, too. We need to look at reigning things in.”

Formosa said the pipes in the ground are 80 years old and it’s a big problem. He said the city needs to keep the pressure on senior levels of government because they have to come to the table on this issue.

Councillor and finance committee chair George Doubt said he supported the rate increases and understands concerns about raising taxes.

“The only reason to raise them is for reasonable and prudent needs,” said Doubt. “I’ll point out that last year, water and sewer rates went up zero per cent. That was because we had a report from the CFO that there were sufficient funds to operate the service for the rates that existed at the time.

“This year we received a report from the CFO that looked at asset management. It was a very well-considered report that looked at a number of options over a period of years, for expected repairs to our aging infrastructure and looked at the probability of big increases in maintenance costs in the coming year. We could either build reserves so we could smooth the collection of funding from the taxpayers and pay for those repairs, or we could do them ad-hoc when the problems came up and try to pay for them out of borrowing and debt.”

Doubt said council agreed in the majority that setting up the reserves, and that the rate increases over the next four years, would be a good idea.

“I supported that then and I support it still,” said Doubt. “I added up during the debate the actual cost, not the percentages, because they can be misleading. The real cost to a ratepayer over all of these increases will be a difference of 35 cents a day. It is significant when you add it all up but it is not going to break the bank.”

Councillor Maggie Hathaway said not increasing taxes means reduced services. She said the city tried one year to reduce service at Powell River Recreation Complex  and there was a huge outcry.

“That’s where we sit trying to make those decisions,” said Hathaway. “What services can we reduce in order to pay for these necessities?”

The finance committee voted to receive the letter.