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2012 taxpayers paid dearly while city hall smoldered

Campbell River taxpayers will look back on 2012 as the year they paid dearly for the failure of the Catalyst Elk Falls pulp mill. They will also remember it as a year in which their bickering municipal leaders struggled to overcome a toxic clash of personalities at city hall.

January started on a sobering note when City Manager Andy Laidlaw announced that a BC Assessment Authority (BCAA) change in the property assessment value of the defunct Elk Falls pulp mill was going to result in a 2012 tax revenue loss to Campbell River in the range of $1.8 million.

The BCAA announced Jan. 3 that the equipment removal at the former Catalyst mill meant it no longer met the legislative requirements for a major industrial property. If that loss was transferred directly to residential taxpayers, they would be required to pay 12 per cent more in property tax, Laidlaw warned.

But, Campbell River Mayor Walter Jakeway boldly declared that there would be no property tax hikes for homeowners.  “My personal intention is to have a zero per cent tax increase in 2012. That’s my personal goal and I’m sure I can bring a few other councillors along with me without having to cut services too badly.”

The next few months of budget debate at city hall would reveal how seriously Jakeway had misjudged his sway over council and city hall administrators. In fact, acrimony at city hall became so paralysing that a consultant referee had to be called in to help the mayor, councillors and staff find ways to get along.

In May a controversial 13.6 per cent tax hike, which had been condemned by hundreds of taxpayers, was adopted by city council. Just as in March’s finance committee meeting and earlier budget meetings the tax increase was adopted by a council deeply divided with councillors Ryan Mennie, Claire Moglove, Larry Samson and Mary Storry voting in favour of the city’s 2012 budget while Mayor Jakeway and councillors Andy Adams and Ron Kerr remained opposed.

Moglove challenged Mayor Jakeway’s assertion that increased property taxes will dissuade people from moving to Campbell River.

Laura Ciarniello, the city’s general manager of corporate services, confirmed Laidlaw’s warning that 12 per cent of the 13.6 per cent tax increase was due to the Catalyst re-classification.

Budget brinkmanship and public anger had one positive outcome. City council emerged determined to get a jump on budget making for 2013 and to make sure the public was fully engaged.

The public would have at least six different opportunities to address city council during budget planning for 2013.

The first two meetings were held in early December.

Even so, council was already looking at some “daunting” numbers in its preliminary 2013 budget-planning process. In the first meetings council deliberated the base budget, the services such as policing and fire that the city has no choice but to fund. Due to inflationary items, contractual increases, wage settlements, and changes imposed on the city through legislation, council was already facing a $713,600 increase in protective services.

Just that figure alone, if borne solely by the residential sector, would equate to a 4.75 per cent residential tax increase for 2013. The biggest impacts to the base budget are an extra $660,335 in CUPE (Canadian Union of Public Employees), the fire fighters union, and management wage and benefit increases, as well as a $448,087 increase in the RCMP contract.

In the second half of 2012 renewed interest in the Catalyst site gave hope that a regeneration of the mill’s industrial tax base could ease the property tax burden. But those hopes would be dashed as summer turned to fall and winter.

In December, after four months of conflicting reports, the $8.6 million deal to sell the Catalyst pulp mill to an Edmonton developer with a questionable track record collapsed. Four deadlines for the sale of the 400-acre property had been missed.

And, none of the grandiose promises made by developer Harold Jahn materialized.

As well, the property has been declared “contaminated” and all development has been frozen pending the approval of remediation plans by the provincial ministry of the environment.

The sale had been announced in mid-August with a great deal of fanfare. Catalyst described Jahn as “an experienced developer.”

As the year wound down the city’s only hope for renewed interest in the site seemed to rest with the economic development corporation Rivercorp. CEO Vic Goodman said: “The highest priority at Rivercorp is the transition of the property to a new owner.”

 

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