City of Powell River Council has given first three readings to its property tax stabilization reserve fund bylaw related to taxes collected from the Catalyst Paper Tis’kwat mill.
At the June 27 special council meeting, chief financial officer Mallory Denniston said following up on council direction during the 2024 financial planning process to establish a property tax stabilization reserve fund, the fund will be established through bylaw. She said the bylaw was being presented for the first three readings.
“Council direction was also to deposit $1.6 million to the credit of this reserve in 2024 from 2024 property taxes,” said Denniston. “This will be the first step in the process of establishing the reserve fund.
“For a little bit more background, the reserve fund must be used for the purposes the bylaw outlines, which is to stabilize property taxes in the event of a change to the major industry assessment. It could be increased should the assessment for major industry be increased, or it could be decreased, should the major industry assessment go down, or be fully eliminated.”
Denniston said the reserve will earn interest and the interest must be used for the purposes of the reserve.
She added that after the adoption of the bylaw, staff will bring forward an updated reserve policy and include this specific reserve in the reserve policy, but council will not see that until the property tax stabilization reserve fund bylaw is adopted. Final adoption is scheduled for the July 11 city council meeting.
Council gave unanimous approval to the first three readings of the bylaw without discussion.
According to a staff report, there are three properties within the city that have major industry class assessments. All three are part of the Tis’kwat mill property, which permanently closed effective for the 2024 property tax year. The staff report indicated the major industry class produced additional revenue in 2024 because the revitalization tax exemption program bylaw that gave the mill a tax break had expired.
The staff report stated the future revenue of the mill property may significantly decline starting in 2025. The reserve fund would be maintained until any potential future changes to the major industry class are stable, according to the report.
In future, council may decide to transfer to or draw from this reserve fund depending on the change in the major industry property class assessment, the report stated.
The bylaw calls for depositing $1.6 million from the 2024 property tax revenue into this reserve fund, which is the money collected in 2024 over and above the $3.3 million collected in 2023 through the revitalization tax exemption program bylaw.
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