City of Powell River Council has amended the city’s reserve fund policy to include the property tax stabilization reserve fund, which was created from the taxes paid in 2024 by the assessment on Catalyst Paper Tis’kwat mill.
At the September 12 city council meeting, chief financial officer Mallory Denniston said she was presenting an amendment to the city reserve fund policy to include the stabilization fund. She said council policy aligns with all the existing reserve funds. The fund, which has $1.6 million in it to stabilize local taxation if industrial taxation drops drastically, has not been included in the reserve policy. The property tax stabilization fund was adopted by city council on July 11 of this year.
Councillor Trina Isakson noted that in an appendix to the staff report on the reserve fund, it states that funding sources are when property tax for major industry is greater than $3.3 million, which was the amount the city was collecting in the last tax exemption bylaw it had with Catalyst; that expired on December 31, 2023. In 2024, the mill had to pay its full taxes, which amounted to an additional $1.6 million over the $3.3 million figure.
Denniston said if council wanted to direct funds to the reserve fund from future years’ taxes, it would have the ability to do so under the bylaw. She said when this reserve fund was coming into play, it was very much tied to the $3.3 million received from major industry.
“This policy won’t restrict council to put money into the fund,” said Denniston.
Councillor Jim Palm, who was serving as acting mayor, asked how much would be going into the reserve and why.
Denniston said $1.6 million would be transferred into the reserve from the 2024 taxes on major industry, and the purpose is that in 2024, there was a one-time-only increase from property taxes from major industry, and if that wasn’t preserved in a reserve, it would have meant a dip in property taxes in 2024 but then a disproportionate increase in the following year.
“What this stabilization reserve does is it allows property taxes to remain more stable and for taxpayers not to experience extreme ups and downs as a result of assessment changes that are beyond the control of city council,” said Denniston.
Councillor Cindy Elliott said the bylaw has created the reserve fund and the reserve policy is one that speaks to all the city’s reserve funds and sets out the city’s intentions for them. She said the major industry tax base is expected to fall at the mill because it is closed, and BC Assessment is changing how it is handling the assessment.
“We have this one windfall year where the mill was required to pay the full amount and it was an increase, but it wasn’t going to be more than that one year,” said Elliott. “We want to stabilize and transfer some of that increase to help us when it goes the other way.”
Elliott asked if the mill was the city’s only major industry property, and Denniston indicated that is the case.
Council unanimously carried a motion to approve the policy bylaw amendment to include the property tax stabilization reserve fund.
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