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Campbell River merger could cause tax increase for all of Area D

If the northern portion of Area D joins the city of Campbell River, taxes may go up in all of the Strathcona Regional District electoral areas, according to a new report.

A report on the service impacts to the regional district, should the city’s boundary extension proposal go through, reveals taxpayers could see increased costs across the board.

Russ Hotsenpiller, the CAO of the regional district, said there are several areas that need to be addressed by the city of Campbell River before the proposal goes any further.

“The report concludes there is a financial impact on taxpayers throughout the regional district electoral areas and there will be either financial, administrative or operational impacts to the fire, water, building inspection, recreation, liquid waste management, community parks, electoral areas administration, grants-in-aid, planning and transit services within Area D,” Hotsenpiller said. “There will also be a reduction in gas tax allocations.”

In all, the electoral areas (non-municipal parts) of the regional district will see a reduction of $167,000 in revenue in selected services which Hotsenpiller said would likely need to be addressed through a tax increase or service arrangements.

“Taxpayers in Area D outside the extension area will receive an approximate $34 per year tax increase to maintain service levels, however, under the Local Government Act, they do not have a vote on the boundary extension,” Hotsenpiller said. “As such, they are unable to directly affect the outcome.”

The other electoral areas will also not have a say in the referendum but could face the following tax increases: $5.90 for the average tax payer in Area A; $10.52 in Area B (Cortes Island); and $9.58 in Area C (Quadra Island).

Hotsenpiller said the regional district could consider reducing the planning program, increasing taxes or a combination of both to address the shortfalls.

As for the gas tax, the regional district would lose $40,000 of its $450,000 gas tax transfer to Campbell River as a result of the regional district losing nine per cent of its rural area population to the city.

The report, conducted by Circle Square Solutions consultants, also revealed the city’s boundary proposal would see the regional district lose 21 per cent of the Area D tax base – a number that exceeds the threshold for mitigation from the province to make up the lost tax dollars.

According to the report, mitigation would come from the city, not the province.

Impacts in the Area A, B, and C electoral areas, however, are below ministry triggers for mitigation but the report found the loss of gas tax monies, as well as a tax increase, will reduce the capacity of those areas to fund projects.

The consultants suggested the regional district propose a three-year mitigation fund to phase out the loss of gas tax revenue.

The report, which was required by the province, will be forwarded to the city for its review and input.

The process is part of the city’s boundary extension proposal to take in 535 Area D properties south of the city limit to McGimpsey Road, an estimated population of 1,235, in order to provide them with sewer service.

If 51 per cent of the affected residents vote during an upcoming referendum in favour of joining the city, each property owner is expected to pay $9,300 – either in one lump sum or over the course of 20 years, likely starting in 2015.

Residents would have up to five years to connect to the city’s sewer system and pay the $1,800 connection fee.

There would also be a third cost – to connect their home to the sewer line.

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